Average deposits grow 31 percent to a record $16.9 billion
Credit quality improves; Provision, net charge-offs and nonperforming assets decline
LOS ANGELES April 29, 2010 (GLOBE NEWSWIRE) -- City National Corporation (NYSE:CYN), the parent company of wholly owned City National Bank, today reported first-quarter 2010 net income of $15.7 million, up 110 percent from $7.5 million in the first quarter of 2009.
First-quarter 2010 net income available to common shareholders was $10.0 million, or $0.19 per share, up from $2.0 million, or $0.04 per share, in the first quarter of 2009. First-quarter 2010 results included a noncash charge of $3.8 million, or $0.07 per share, for the repurchase of $200 million of preferred stock issued to the U.S. Treasury Department.
FIRST-QUARTER 2010 HIGHLIGHTS
- City National's first-quarter operating revenue (excluding securities transactions) grew 21 percent from the first quarter of 2009.1 Including securities transactions, revenue increased 31 percent to $252.4 million.
- Fully taxable-equivalent net interest income amounted to $178.8 million, up 21 percent from the same period last year and 8 percent from the fourth quarter of 2009. City National's net interest margin averaged 3.97 percent in the first quarter of 2010, up from 3.74 percent in the fourth quarter of 2009 due largely to strong deposit growth and the company's fourth-quarter 2009 acquisition of Imperial Capital Bank.
- Average deposit balances, including those acquired from Imperial Capital Bank, grew to a record $16.9 billion, up 31 percent from $12.8 billion in the first quarter of 2009 and 7 percent from $15.7 billion in the fourth quarter of last year. At March 31, 2010, deposits from Imperial Capital Bank totaled $919.7 million. Average core deposits were up 37 percent from the year-ago period and 8 percent from the fourth quarter of 2009, reaching a record $15.6 billion or 93 percent of average deposits.
- Average loans, excluding Imperial Capital Bank loans covered by City National's loss-sharing agreement with the FDIC, were $11.9 billion, down 4 percent from the same period last year and 1 percent from the fourth quarter of 2009.
- First-quarter 2010 net income includes a $55 million provision for credit losses, 31 percent lower than it was in the fourth quarter of 2009. The first-quarter provision added $5.5 million, after net charge-offs, to the company's allowance for loan and lease losses. Net charge-offs declined 16 percent from the fourth quarter of 2009, while nonperforming assets, excluding FDIC-covered assets, declined 12 percent.
- On March 4, 2010, City National repurchased $200 million in TARP preferred securities – the remaining half of a $400 million investment made in the company by the U.S. Treasury Department in November 2008. The transaction completed City National's repurchase of all preferred shares held by the federal government. The company repurchased the first $200 million of these securities on December 30, 2009. On April 8, 2010, City National repurchased all outstanding TARP warrants issued to the U.S. Treasury Department. The purchase price for the warrants was $18.5 million.
- City National remains well-capitalized. Its ratio of total capital to risk-based assets at March 31, 2010 was 14.4 percent, compared to 13.6 percent at March 31, 2009, and 15.2 percent at December 31 of last year. Its first-quarter ratio of Tier 1 common shareholders' equity to risk-based assets was 9.4 percent, compared to 8.6 percent at March 31, 2009, and 8.9 percent at December 31 of last year. 1
- On April 21, 2010, City National's Board of Directors maintained a quarterly common stock cash dividend of $0.10 per share. It is the 16th consecutive year that City National has paid a dividend every quarter.
"In the first quarter of 2010, City National delivered another quarter of increasing profitability, improving credit quality and growing deposits," said President and Chief Executive Officer Russell Goldsmith. "In addition, we successfully integrated our acquisition of Imperial Capital Bank, adding a net total of three new branches in Beverly Hills, Costa Mesa and San Francisco for an overall total of 67.
"With TARP behind us, credit quality showing signs of improvement, and the national economy continuing to recover, we expect enhanced profitability in the remainder of 2010."
| For the three months ended March 31, | |||||
| Dollars in millions, except per share | 2010 | 2009 |
% Change |
For the three months ended December 31, 2009 |
% Change |
| Earnings Per Share | $ 0.19 | $ 0.04 | 375 | $ 0.38 | (50) |
| Net Income Attributable to CNC | $ 15.7 | $ 7.5 | 110 | $ 29.1 | (46) |
| Less: Dividends and Accretion on Preferred Stock | 5.7 | 5.5 | 4 | 9.4 | (39) |
| Net Income Available to Common Shareholders | $ 10.0 | $ 2.0 | 410 | $ 19.7 | (49) |
| Average Assets | $ 20,267.2 | $ 16,411.2 | 23 | $ 19,095.2 | 6 |
| Return on Average Assets | 0.31 % | 0.18 % | 72 | 0.60 % | (48) |
| Return on Average Common Shareholders' Equity | 2.20 % | 0.49 % | 349 | 4.27 % | (48) |
ASSETS
Total assets at March 31, 2010 were $20.1 billion, up 19 percent from the first quarter of 2009, largely reflecting the company's strong deposit growth as well as its acquisition of Imperial Capital Bank. Total assets were down 5 percent from the fourth quarter of last year, primarily due to lower loan demand and the continuing reduction of troubled assets.
REVENUE
Revenue for the first quarter of 2010 was $252.4 million, up 31 percent from the first quarter of 2009 but down 8 percent from the fourth quarter of last year. First-quarter operating revenue (excluding securities transactions) grew 21 percent from the first quarter of 2009.1
NET INTEREST INCOME
Fully taxable-equivalent net interest income was $178.8 million in the first quarter of 2010, up 21 percent from the first quarter of 2009 and 8 percent from the fourth quarter of last year. The year-over-year increase was due primarily to strong deposit growth and the company's acquisition of Imperial Capital Bank.
First-quarter average deposits grew to a record $16.9 billion, up 31 percent from the same period of 2009 and 7 percent from the fourth quarter of last year. Average core deposits were $15.6 billion in the first quarter of 2010, up 37 percent from the same period of 2009 and 8 percent from the fourth quarter of 2009.
First-quarter average noninterest-bearing deposits were up 27 percent from the same period of 2009 but down 3 percent from the fourth quarter of last year.
Treasury Services deposit balances, which consist primarily of title, escrow and property management deposits, averaged $1.1 billion in the first quarter of 2010, up 44 percent from the same period of 2009 and 2 percent from the fourth quarter of 2009 due to the addition of new clients, an increase in residential real estate activity and modest improvement in commercial real estate and apartment financing.
First-quarter average loan balances, excluding FDIC-covered loans, were $11.9 billion, down 4 percent from the first quarter of 2009 and 1 percent from the fourth quarter of last year. Commercial loans were down 4 percent from the same period last year and 1 percent the fourth quarter of 2009.
Commercial real estate and construction loans together were down 14 percent from the year-ago first quarter and 4 percent from the fourth quarter of 2009. Average balances for single-family residential mortgage loans, nearly all of which are made to City National's private banking clients, were up 3 percent from the year-ago period but virtually unchanged from the fourth quarter of 2009.
In the first quarter of 2010, the company renewed approximately $1.2 billion of loans and made approximately $572 million in new loan commitments. About $282 million of these new commitments were drawn down by clients.
Average securities for the first quarter of 2010 totaled $4.0 billion, up 67 percent from the same period last year and 4 percent from the fourth quarter of 2009. The increases reflected the company's strong deposit growth. The average duration of total available-for-sale securities at March 31, 2010 was 2.9 years, up from 2.5 years at the end of the first quarter of 2009 but unchanged from year end.
City National's net interest margin in the first quarter of 2010 averaged 3.97 percent, compared with 4.00 percent in first quarter of 2009 and 3.74 percent in the fourth quarter of 2009. The increase from the fourth quarter was largely due to a shift from lower yielding investments to higher yielding loans as a result of the company's acquisition of Imperial Capital Bank.
At March 31, 2010, City National's prime lending rate was 3.25 percent, unchanged from both March 31, 2009 and December 31, 2009.
|
For the three months ended March 31, |
|||||
| Dollars in millions | 2010 | 2009 |
% Change |
For the three months ended December 31, 2009 |
% Change |
| Average Loans and Leases, | |||||
| excluding Covered Loans | $ 11,944.3 | $ 12,395.4 | (4) | $ 12,100.4 | (1) |
| Average Covered Loans | 1,833.1 | -- | NM | 263.7 | 595 |
| Average Total Securities | 4,036.4 | 2,417.1 | 67 | 3,877.9 | 4 |
| Average Earning Assets | 18,281.0 | 15,032.9 | 22 | 17,606.8 | 4 |
| Average Deposits | 16,864.2 | 12,841.1 | 31 | 15,729.9 | 7 |
| Average Core Deposits | 15,625.3 | 11,377.8 | 37 | 14,509.2 | 8 |
| Fully Taxable-Equivalent | |||||
| Net Interest Income | 178.8 | 148.4 | 21 | 165.8 | 8 |
| Net Interest Margin | 3.97 % | 4.00 % | (1) | 3.74 | 6 |
NONINTEREST INCOME
Noninterest income was $76.9 million in the first quarter of 2010, up 63 percent from the year-ago period. The increase was due largely to a $1.1 million net gain on securities in the first quarter of 2010 compared with a $15.0 million net loss in the year-ago period. It also includes $9.1 million of income from the company's loss-sharing agreement with the FDIC. Noninterest income was down 31 percent from the fourth quarter of 2009, when City National recorded a $38.2 million pretax gain on its acquisition of Imperial Capital Bank.
At March 31, 2010, noninterest income accounted for 30 percent of City National's total revenue, up from 25 percent at March 31, 2009.
Wealth Management
City National's assets under management totaled $35.8 billion as of March 31, 2010, up 26 percent from the same period of 2009 and 2 percent from the fourth quarter of last year. The year-over-year increase is due primarily to higher equity market values and the July 21, 2009 Lee Munder Capital Group acquisition, which were offset by the deconsolidation of an affiliate's assets under management during the fourth quarter of 2009.
Trust and investment fees were $33.5 million, up 30 percent from the first quarter of 2009, but down 1 percent from the fourth quarter of last year. The year-over-year increase was due primarily to the Lee Munder Capital Group acquisition and improving market conditions. Brokerage and money market mutual fund fees totaled $5.3 million, down 46 percent from the year-ago period and 4 percent from fourth quarter. These declines were due to historically low interest rates on government and other quality short-term bonds, as investment fees were reduced to maintain a positive yield for fund investors. Additionally, brokerage fees declined significantly from the year-ago period, reflecting reduced spreads and transaction activity.
|
At or for the three months ended March 31, |
|||||
| Dollars in millions | 2010 | 2009 |
% Change |
At or for the three months ended December 31, 2009 |
% Change |
| Trust and Investment Fee Revenue | $ 33.5 | $ 25.9 | 30 | $ 33.7 | (1) |
| Brokerage and Mutual Fund Fees | 5.3 | 9.8 | (46) | 5.5 | (4) |
| Assets Under Management (1)(2) | 35,783.4 | 28,414.0 | 26 | 35,238.8 | 2 |
| Assets Under Management or Administration (1)(2) | 55,844.3 | 45,722.2 | 22 | 55,119.4 | 1 |
| (1) Excludes $12.7 billion, $11.5 billion, and $4.5 billion of assets under management for an asset manager in which City National held a noncontrolling ownership interest as of March 31, 2010, December 31, 2009, and March 31, 2009, respectively. | |||||
| (2) Excludes $2.1 billion and $1.9 billion of assets under management and administration as of March 31, 2010 and December 31, 2009, respectively, for an asset manager that City National deconsolidated effective November 1, 2009. | |||||
Other Noninterest Income
Income from cash management and deposit transaction fees was down 5 percent from the same period of last year, but up slightly from the fourth quarter of 2009. The year-over-year decline was due to lower client transaction volumes.
Fee income from foreign exchange services and letters of credit totaled $6.5 million in the first quarter, virtually unchanged from the year-earlier period but down 24 percent from the fourth quarter of last year. The decrease was due in large part to higher seasonal demand for foreign exchange services in the last three months of the year, as clients close-out positions and settle year-end obligations.
Other income was $8.1 million in the first quarter, up 35 percent from the year-ago period and 223 percent from the fourth quarter of 2009. Fourth-quarter results included charges for the impairment of private equity investments and the deconsolidation of an investment affiliate.
NONINTEREST EXPENSE
City National's first-quarter noninterest expense amounted to $175.9 million, up 32 percent from the first quarter of 2009. This increase was due largely to the acquisitions of Imperial Capital Bank, Lee Munder Capital Group and the bank's new branch in San Jose, Calif., during 2009. It also reflects increased compensation expense as well as an additional $17.1 million for other real estate owned (OREO) properties and a $3.5 million increase in FDIC costs. Approximately $7.4 million of the OREO increase is related to the Imperial Capital acquisition. Eighty percent – or $5.9 million – of this amount is reimbursed to the company and reflected in noninterest income from the FDIC loss-sharing agreement.
Noninterest expense increased 10 percent from the fourth quarter of last year, due primarily to higher personnel costs, other real estate owned expense, FDIC assessments and the acquisition of Imperial Capital Bank.
CREDIT QUALITY
The following credit quality information excludes Imperial Capital Bank loans subject to City National's loss-sharing agreement with the FDIC:
Net loan charge-offs in the first quarter of 2010 totaled $49.5 million, or 1.68 percent of average total loans and leases on an annualized basis. Net charge-offs were $33.6 million, or 1.10 percent of total loans and leases, in the first quarter of 2009 and $58.7 million, or 1.93 percent, in the fourth quarter of 2009.
At March 31, 2010, nonperforming assets amounted to $388.0 million, or 3.30 percent of the company's total loans and leases and other real estate owned (OREO), down from $442.0 million, or 3.62 percent, at December 31, 2009 but up from $326.3 million, or 2.65 percent, at March 31, 2009. Nonaccrual loans at March 31, 2010 were $330.0 million, down from $388.7 million at December 31, 2009 but up from $313.6 million at March 31, 2009.
|
As of March 31, 2010 |
As of December 31, 2009 |
As of March 31, 2009 |
||||
| Period-end Loans (in millions) | Total | Nonaccrual | Total | Nonaccrual | Total | Nonaccrual |
| Commercial Loans | $ 4,424.2 | $ 73.8 | $ 4,709.7 | $ 82.0 | $ 4,708.6 | $ 56.2 |
| Commercial Real Estate Mortgages | 2,121.9 | 66.2 | 2,161.4 | 76.0 | 2,174.0 | 16.9 |
| Residential Mortgages | 3,514.2 | 12.0 | 3,533.4 | 15.5 | 3,413.5 | 13.3 |
| Real Estate Construction Loans | 730.7 | 165.0 | 835.6 | 202.6 | 1,189.6 | 223.4 |
| Equity Lines of Credit | 733.6 | 4.1 | 734.2 | 3.4 | 651.1 | 2.4 |
| Other Loans | 164.9 | 8.9 | 172.6 | 9.2 | 168.3 | 1.4 |
| Total Loans (1) | $ 11,689.5 | $ 330.0 | $ 12,146.9 | $ 388.7 | $ 12,305.1 | $ 313.6 |
| Other Real Estate Owned (1) | 58.0 | 53.3 | 12.6 | |||
| Total Nonperforming Assets, excluding Covered Assets | $ 388.0 | $ 442.0 | $ 326.2 | |||
| (1) Excludes covered loans of $1.8 billion at March 31, 2010 and December 31, 2009 and covered other real estate owned of $77.5 million and $60.6 million at March 31, 2010 and December 31, 2009, respectively. | ||||||
City National's first-quarter provision of $55 million added $5.5 million, after net charge-offs, to the company's allowance for loan and lease losses. City National recorded provisions of $50 million in the first quarter of 2009 and $80 million in the fourth quarter of the year.
At March 31, 2010, City National's allowance for loan and lease losses increased to $292.8 million, or 2.50 percent of total loans and leases. That compares with $241.6 million, or 1.96 percent, at the end of the first quarter of 2009 and $288.5 million, or 2.38 percent at December 31, 2009. The company also maintains an additional $18.5 million in reserves for off-balance-sheet credit commitments.
City National's provision reflects management's continuing assessment of the loan portfolio's credit quality, which is affected by a broad range of economic factors. Additional factors affecting the provision include net loan charge-offs, nonaccrual loans, specific reserves, risk-rating migration and changes in the portfolio size.
Commercial Loans
Commercial loans accounted for $13.5 million of City National's net charge-offs in the first quarter of this year, down from $18.5 million in the year-earlier period and $23.1 million in the fourth quarter of 2009.
Commercial loans on nonaccrual totaled $73.8 million at March 31, 2010, compared to $56.2 million at March 31, 2009, and $82.0 million at the end of 2009. These loans are not concentrated in any particular industry.
Construction Loans
City National's $730.7 million commercial real estate construction portfolio includes loans to developers of residential and nonresidential properties. This portfolio has been reduced 39 percent since March 31, 2009.
First-quarter net charge-offs of construction loans were $14.2 million, up 1 percent from the first quarter of 2009, but down 49 percent from $27.6 million in the fourth quarter of 2009. At March 31, 2010, construction loans on nonaccrual totaled $165.0 million, down from $223.4 million at March 31, 2009 and $202.6 million at December 31, 2009.
The company's portfolio of loans to residential developers showed further signs of improvement through the first quarter of this year. At March 31, 2010, loans to homebuilders totaled $236 million, down from $264 million in the fourth quarter of 2009. These loans now equal 2 percent of City National's $11.7 billion loan portfolio, excluding loans covered by the FDIC loss-sharing agreement. (The company's portfolio of loans to homebuilders includes $67 million of loans in the bank's commercial loan portfolio.) Loans to homebuilders accounted for 36 percent of all construction loans on nonaccrual at March 31, 2010.
The remainder of City National's construction portfolio consists of loans to developers of non-residential projects, and this sector continued to show some signs of stress. Nonresidential construction loans amounted to $565 million at March 31, 2010, down from $846 million at March 31, 2009 and $649 million at December 31, 2009. First-quarter 2010 net charge-offs totaled $13 million, up from $4 million in the first quarter of 2009 and $10 million in the fourth quarter of 2009. Those on nonaccrual were $105 million, up from $69 million at March 31, 2009 but down from $148 million at December 31, 2009.
Commercial Real Estate Mortgage Loans
First-quarter net charge-offs in the company's $2.1 billion commercial real estate mortgage portfolio were $15.0 million, compared with zero net charge-offs in the first quarter of 2009 and $5.3 million in the fourth quarter of 2009. The increases reflect continued weakness in the commercial real estate sector, as evidenced by reductions in values and lease and sales activity.
Commercial real estate mortgage loans on nonaccrual totaled $66.2 million at March 31, 2010, compared with $16.9 million at March 31, 2009 and $76.0 million at December 31, 2009.
Residential Mortgage Loans
City National's $3.5 billion residential mortgage portfolio and $734 million home-equity portfolio continued to perform well. First-quarter net charge-offs were $1.6 million, compared with $405,000 in the first quarter of 2009 and $1.2 million the fourth quarter of 2009. Residential mortgage loans on nonaccrual were $12.0 million at the end of the first quarter, down from $13.3 million in the year-earlier period and $15.5 million in the fourth quarter of 2009.
COVERED ASSETS
Loans and OREO assets acquired in City National's FDIC-assisted acquisition of Imperial Capital Bank totaled $1.9 billion at the end of the first quarter of 2010.
Under terms of its loss-sharing agreement with City National, the FDIC will reimburse the bank for 80 percent of all eligible losses under $649 million and 95 percent of eligible losses exceeding that amount.
For accounting purposes, loans subject to City National's loss-sharing agreement with the FDIC are generally considered accruing and performing. OREO assets acquired from Imperial Capital Bank and subject to the loss-sharing agreement totaled $77.5 million at March 31, 2010, up from $60.6 million at the end of 2009.
INCOME TAXES
City National's effective tax rate for the first quarter of 2010 was 20.6 percent, compared to 17.7 percent in the year-ago period. The higher tax rate for the first quarter of this year is attributable to higher pretax income.
CAPITAL LEVELS
City National remains well capitalized, ending the first quarter of 2010 with a tangible common shareholders' equity ratio of 6.7 percent, compared to 6.9 percent at March 31, 2009 and 6.2 percent at December 31, 2009. 1
Total risk-based capital and Tier 1 risk-based capital ratios at March 31, 2010 were 14.4 percent and 11.4 percent, respectively. City National's Tier 1 leverage ratio at March 31, 2010 was 8.0 percent. All of City National's capital ratios are above minimum regulatory standards for "well-capitalized" institutions.
Total risk-based capital, Tier 1 risk-based capital and the Tier 1 leverage ratios at December 31, 2009 were 15.2 percent, 12.2 percent and 9.5 percent, respectively.
The period-end ratio of shareholders' equity to total assets at March 31, 2010 was 9.3 percent, compared to 12.1 percent at March 31, 2009 and 9.6 percent at December 31, 2009. The decline from the year-ago period reflects the company's third-quarter 2009 acquisition of Lee Munder Capital Group and its fourth-quarter acquisition of Imperial Capital Bank.
2010 OUTLOOK
Management continues to expect increased profitability in 2010 over 2009, as credit quality and the nation's economy continue to show signs of improvement.
CONFERENCE CALL
City National Corporation will host a conference call this afternoon to discuss first-quarter 2010 financial results. The call will begin at 2:00 p.m. PDT. Analysts and investors may dial in and participate in the question/answer session. To access the call, please dial (866) 393-6804 and enter Conference ID 63500999. A listen-only live broadcast of the call also will be available on the investor relations page of the company's Website at www.cnb.com. There, it will be archived and available for 12 months.
ABOUT CITY NATIONAL
City National Corporation's wholly owned subsidiary, City National Bank, provides banking, investment and trust services through 67 offices, including 17 full-service regional centers, in Southern California, the San Francisco Bay Area, Nevada and New York City. The company and its seven consolidated investment affiliates manage or administer $55.8 billion in client assets, including nearly $36 billion under direct management.
For more information about City National, visit the company's Website at www.cnb.com.
The City National Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3142
SAFE-HARBOR LANGUAGE
This news release contains forward-looking statements about the Company, for which the Company claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the company's possible or assumed future financial condition, and its results of operations, business and earnings outlook. These forward-looking statements are subject to risks and uncertainties. A number of factors, some of which are beyond the company's ability to control or predict, could cause future results to differ materially from those contemplated by such forward-looking statements. These factors include (1) local, regional and international business, economic and political conditions, (2) volatility in financial markets, including capital and credit markets, (3) significant changes in banking laws or regulations, including without limitation, broad-based restructuring of financial industry regulation, (4) increases and required prepayments in Federal Deposit Insurance Corporation premiums and special federal assessments on financial institutions due to market developments and regulatory changes, (5) changes in the level of nonperforming assets, charge-offs, other real estate owned and provision expense, (6) incorrect assumption in the value of the loans acquired in the Imperial Capital Bank (ICB) acquisition resulting in greater than anticipated losses in the ICB loan portfolio exceeding the losses covered by the loss-sharing agreement with the FDIC, (7) changes in inflation, interest rates, and market liquidity which may impact interest margins and impact funding sources, (8) adequacy of the company's enterprise risk management framework, (9) company's ability to increase market share and control expenses, (10) company's ability to attract new employees and retain and motivate existing employees, (11) increased competition in the company's markets, (12) changes in the financial performance and/or condition of the company's borrowers, including changes in levels of unemployment, changes in customers' suppliers, and other counterparties' performance and creditworthiness, (13) a substantial and permanent loss of either client accounts and/or assets under management at the company's investment advisory affiliates or its wealth management division, (14) changes in consumer spending, borrowing and savings habits, (15) soundness of other financial institutions which could adversely affect the company, (16) protracted labor disputes in the company's markets, (17) earthquake, fire or other natural disasters affecting the condition of real estate collateral, (18) the effect of acquisitions and integration of acquired businesses and de novo branching efforts, (19) the impact of changes in regulatory, judicial or legislative tax treatment of business transactions, (20) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies, and (21) the success of the company at managing the risks involved in the foregoing.
Forward-looking statements speak only as of the date they are made, and the company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the statements are made, or to update earnings guidance, including the factors that influence earnings.
For a more complete discussion of these risks and uncertainties, see the Company's Annual Report on Form 10-K for the year ended December 31, 2009 and particularly, Item 1A, titled "Risk Factors."
1 For notes on non-GAAP measures, see pages 13 and 14 of the Selected Financial Information.
| CITY NATIONAL CORPORATION | ||||||
| FINANCIAL HIGHLIGHTS | ||||||
| (unaudited) | ||||||
| Three Months | ||||||
| For The Period Ended March 31, | 2010 | 2009 | % Change | |||
| Per Common Share | ||||||
| Net income available to common shareholders | ||||||
| Basic | $ 0.19 | $ 0.04 | 375 | |||
| Diluted | 0.19 | 0.04 | 375 | |||
| Dividends | 0.10 | 0.25 | (60) | |||
| Book value | 35.43 | 33.87 | 5 | |||
| Results of Operations: (In millions) | ||||||
| Interest income | $ 202 | $ 170 | 19 | |||
| Interest expense | 26 | 25 | 8 | |||
| Net interest income | 176 | 145 | 21 | |||
| Net interest income (Fully taxable-equivalent) | 179 | 148 | 21 | |||
| Total revenue | 252 | 192 | 31 | |||
| Provision for credit losses | 55 | 50 | 10 | |||
| Net income attributable to City National Corporation | 16 | 7 | 110 | |||
| Net income available to common shareholders | 10 | 2 | 410 | |||
| Financial Ratios: | ||||||
| Performance Ratios: | ||||||
| Return on average assets | 0.31 % | 0.18 % | ||||
| Return on average common shareholders' equity | 2.20 | 0.49 | ||||
| Period-end equity to period-end assets | 9.29 | 12.10 | ||||
| Net interest margin | 3.97 | 4.00 | ||||
| Expense to revenue ratio | 62.24 | 68.14 | ||||
| Capital Adequacy Ratios (Period-end): | ||||||
| Tier 1 leverage | 8.03 | 10.04 | ||||
| Tier 1 risk-based capital | 11.44 | 11.71 | ||||
| Total risk-based capital | 14.42 | 13.55 | ||||
| Asset Quality Ratios: | ||||||
| Allowance for loan and lease losses to: | ||||||
| Total loans and leases, excluding covered loans | 2.50 % | 1.96 % | ||||
| Nonaccrual loans | 88.72 | 77.03 | ||||
| Nonperforming assets to: | ||||||
| Total loans and leases and other real estate owned, excluding covered assets | 3.30 | 2.65 | ||||
| Total assets | 1.93 | 1.93 | ||||
| Net charge-offs to average total loans and leases, excluding covered loans (annualized) | (1.68) % | (1.10) % | ||||
| Average Balances: (In millions) | ||||||
| Loans and leases, excluding covered loans | $ 11,944 | $ 12,395 | (4) | |||
| Covered loans | 1,833 | -- | NM | |||
| Interest-earning assets | 18,281 | 15,033 | 22 | |||
| Assets | 20,267 | 16,411 | 23 | |||
| Core deposits | 15,625 | 11,378 | 37 | |||
| Deposits | 16,864 | 12,841 | 31 | |||
| Interest-bearing liabilities | 10,382 | 8,107 | 28 | |||
| Common shareholders' equity | 1,844 | 1,635 | 13 | |||
| Total equity | 2,003 | 2,050 | (2) | |||
| Period-End Balances : (In millions) | ||||||
| Loans and leases, excluding covered loans | $ 11,690 | $ 12,305 | (5) | |||
| Covered loans | 1,803 | -- | NM | |||
| Assets | 20,066 | 16,934 | 19 | |||
| Core deposits | 15,829 | 12,252 | 29 | |||
| Deposits | 16,964 | 13,690 | 24 | |||
| Common shareholders' equity | 1,838 | 1,633 | 13 | |||
| Total equity | 1,863 | 2,049 | (9) | |||
| Wealth Management: (In millions) (1)(2) | ||||||
| Assets under management | $ 35,783 | $ 28,414 | 26 | |||
| Assets under management or administration | 55,844 | 45,722 | 22 | |||
| (1) Excludes $12.7 billion and $4.5 billion of assets under management for an asset manager in which City National held a noncontrolling ownership interest as of March 31, 2010 and March 31, 2009, respectively. | ||||||
| (2) Excludes $2.1 billion of assets under management or administration as of March 31, 2010 for an asset manager that City National deconsolidated effective November 1, 2009. | ||||||
| Note: Certain prior period balances have been reclassified to conform to current period presentation. | ||||||
| CITY NATIONAL CORPORATION | ||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||
| (unaudited) | ||||||
| Three Months Ended | ||||||
| March 31, | ||||||
| (Dollars in thousands except per share data) | 2010 | 2009 | % Change | |||
| Interest income | $ 202,066 | $ 169,491 | 19 | |||
| Interest expense | 26,561 | 24,594 | 8 | |||
| Net Interest Income | 175,505 | 144,897 | 21 | |||
| Provision for Credit Losses | 55,000 | 50,000 | 10 | |||
| Noninterest Income | ||||||
| Trust and investment fees | 33,509 | 25,869 | 30 | |||
| Brokerage and mutual fund fees | 5,281 | 9,757 | (46) | |||
| Cash management and deposit transaction fees | 12,576 | 13,223 | (5) | |||
| International services | 6,508 | 6,525 | (0) | |||
| Bank-owned life insurance | 678 | 863 | (21) | |||
| FDIC loss sharing income, net | 9,086 | -- | NM | |||
| Gain (loss) on securities | 1,131 | (14,967) | 108 | |||
| Other | 8,104 | 6,025 | 35 | |||
| Total noninterest income | 76,873 | 47,295 | 63 | |||
| Noninterest Expense | ||||||
| Salaries and employee benefits | 95,661 | 78,252 | 22 | |||
| Net occupancy of premises | 12,905 | 12,261 | 5 | |||
| Legal and professional fees | 8,981 | 7,733 | 16 | |||
| Information services | 7,516 | 6,480 | 16 | |||
| Depreciation and amortization | 6,347 | 5,992 | 6 | |||
| Amortization of intangibles | 2,447 | 1,843 | 33 | |||
| Marketing and advertising | 5,248 | 4,676 | 12 | |||
| Office services and equipment | 3,798 | 3,604 | 5 | |||
| Other real estate owned | 17,197 | 94 | 18,195 | |||
| FDIC assessments | 6,521 | 3,068 | 113 | |||
| Other | 9,313 | 8,982 | 4 | |||
| Total noninterest expense | 175,934 | 132,985 | 32 | |||
| Income Before Taxes | 21,444 | 9,207 | 133 | |||
| Applicable Income Taxes | 4,418 | 1,632 | 171 | |||
| Net Income | $ 17,026 | $ 7,575 | 125 | |||
| Less: Net income attributable to noncontrolling interest | 1,328 | 115 | 1,055 | |||
| Net income attributable to City National Corporation | $ 15,698 | $ 7,460 | 110 | |||
| Less: Dividends and accretion on preferred stock | 5,702 | 5,501 | 4 | |||
| Net income available to common shareholders | $ 9,996 | $ 1,959 | 410 | |||
| Other Data: | ||||||
| Earnings per common share - basic | $ 0.19 | $ 0.04 | 375 | |||
| Earnings per common share - diluted | $ 0.19 | $ 0.04 | 375 | |||
| Dividends paid per common share | $ 0.10 | $ 0.25 | (60) | |||
| Common dividend payout ratio | 52.16 % | 619.32 % | (92) | |||
| Return on average assets | 0.31 % | 0.18 % | 72 | |||
| Return on average common shareholders' equity | 2.20 % | 0.49 % | 349 | |||
| Net interest margin (Fully taxable-equivalent) | 3.97 % | 4.00 % | (1) | |||
| Full-time equivalent employees | 2,983 | 2,933 | 2 | |||
| Note: Certain prior period balances have been reclassified to conform to current period presentation. | ||||||
| CITY NATIONAL CORPORATION | ||||
| CONSOLIDATED QUARTERLY STATEMENTS OF INCOME | ||||
| (unaudited) | ||||
| 2010 | 2009 | |||
| (Dollars in thousands except per share data) |
First Quarter |
Fourth Quarter |
||
| Interest income | $ 202,066 | $ 183,291 | ||
| Interest expense | 26,561 | 21,052 | ||
| Net Interest Income | 175,505 | 162,239 | ||
| Provision for Credit Losses | 55,000 | 80,000 | ||
| Noninterest Income | ||||
| Trust and investment fees | 33,509 | 33,720 | ||
| Brokerage and mutual fund fees | 5,281 | 5,489 | ||
| Cash management and deposit transaction fees | 12,576 | 12,526 | ||
| International services | 6,508 | 8,591 | ||
| Bank-owned life insurance | 678 | 680 | ||
| FDIC loss sharing income, net | 9,086 | 723 | ||
| Gain on securities | 1,131 | 8,397 | ||
| Gain on acquisition | -- | 38,206 | ||
| Other | 8,104 | 2,509 | ||
| Total noninterest income | 76,873 | 110,841 | ||
| Noninterest Expense | ||||
| Salaries and employee benefits | 95,661 | 85,926 | ||
| Net occupancy of premises | 12,905 | 12,990 | ||
| Legal and professional fees | 8,981 | 12,323 | ||
| Information services | 7,516 | 7,021 | ||
| Depreciation and amortization | 6,347 | 7,802 | ||
| Amortization of intangibles | 2,447 | 2,120 | ||
| Marketing and advertising | 5,248 | 6,092 | ||
| Office services and equipment | 3,798 | 3,859 | ||
| Other real estate owned | 17,197 | 3,486 | ||
| FDIC assessments | 6,521 | 5,816 | ||
| Other | 9,313 | 11,809 | ||
| Total noninterest expense | 175,934 | 159,244 | ||
| Income Before Taxes | 21,444 | 33,836 | ||
| Applicable Income Taxes | 4,418 | 4,434 | ||
| Net Income | $ 17,026 | $ 29,402 | ||
| Less: Net income attributable to noncontrolling interest | 1,328 | 335 | ||
| Net income attributable to City National Corporation | $ 15,698 | $ 29,067 | ||
| Less: Dividends and accretion on preferred stock | 5,702 | 9,399 | ||
| Net income available to common shareholders | $ 9,996 | $ 19,668 | ||
| Other Data: | ||||
| Earnings per common share - basic | $ 0.19 | $ 0.38 | ||
| Earnings per common share - diluted | $ 0.19 | $ 0.38 | ||
| Dividends paid per common share | $ 0.10 | $ 0.10 | ||
| Common dividend payout ratio | 52.16 % | 26.47 % | ||
| Return on average assets | 0.31 % | 0.60 % | ||
| Return on average common shareholders' equity | 2.20 % | 4.27 % | ||
| Net interest margin (Fully taxable-equivalent) | 3.97 % | 3.74 % | ||
| Full-time equivalent employees | 2,983 | 3,017 | ||
| Note: Certain prior period balances have been reclassified to conform to current period presentation. | ||||
| CITY NATIONAL CORPORATION | ||||||||||
| CONSOLIDATED QUARTERLY STATEMENTS OF INCOME | ||||||||||
| (unaudited) | ||||||||||
| 2009 | ||||||||||
| (Dollars in thousands except per share data) | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Year to Date | |||||
| Interest income | $ 183,291 | $ 180,419 | $ 175,876 | $ 169,491 | $ 709,077 | |||||
| Interest expense | 21,052 | 19,078 | 20,300 | 24,594 | 85,024 | |||||
| Net Interest Income | 162,239 | 161,341 | 155,576 | 144,897 | 624,053 | |||||
| Provision for Credit Losses | 80,000 | 85,000 | 70,000 | 50,000 | 285,000 | |||||
| Noninterest Income | ||||||||||
| Trust and investment fees | 33,720 | 32,289 | 25,184 | 25,869 | 117,062 | |||||
| Brokerage and mutual fund fees | 5,489 | 6,041 | 6,645 | 9,757 | 27,932 | |||||
| Cash management and deposit transaction fees | 12,526 | 13,142 | 12,778 | 13,223 | 51,669 | |||||
| International services | 8,591 | 7,895 | 7,996 | 6,525 | 31,007 | |||||
| Bank-owned life insurance | 680 | 639 | 871 | 863 | 3,053 | |||||
| FDIC loss sharing income, net | 723 | -- | -- | -- | 723 | |||||
| Gain (loss) on securities | 8,397 | 2,667 | 1,744 | (14,967) | (2,159) | |||||
| Gain on acquisition | 38,206 | -- | -- | -- | 38,206 | |||||
| Other | 2,509 | 6,172 | 9,039 | 6,025 | 23,745 | |||||
| Total noninterest income | 110,841 | 68,845 | 64,257 | 47,295 | 291,238 | |||||
| Noninterest Expense | ||||||||||
| Salaries and employee benefits | 85,926 | 80,937 | 75,834 | 78,252 | 320,949 | |||||
| Net occupancy of premises | 12,990 | 12,613 | 12,559 | 12,261 | 50,423 | |||||
| Legal and professional fees | 12,323 | 8,545 | 7,736 | 7,733 | 36,337 | |||||
| Information services | 7,021 | 7,342 | 6,992 | 6,480 | 27,835 | |||||
| Depreciation and amortization | 7,802 | 6,472 | 5,953 | 5,992 | 26,219 | |||||
| Amortization of intangibles | 2,120 | 1,726 | 1,668 | 1,843 | 7,357 | |||||
| Marketing and advertising | 6,092 | 4,615 | 4,743 | 4,676 | 20,126 | |||||
| Office services and equipment | 3,859 | 3,610 | 3,922 | 3,604 | 14,995 | |||||
| Other real estate owned | 3,486 | 2,231 | 2,155 | 94 | 7,966 | |||||
| FDIC assessments | 5,816 | 5,308 | 13,861 | 3,068 | 28,053 | |||||
| Other | 11,809 | 10,366 | 8,711 | 8,982 | 39,868 | |||||
| Total noninterest expense | 159,244 | 143,765 | 144,134 | 132,985 | 580,128 | |||||
| Income Before Taxes | 33,836 | 1,421 | 5,699 | 9,207 | 50,163 | |||||
| Applicable Income Taxes | 4,434 | (6,966) | (986) | 1,632 | (1,886) | |||||
| Net Income | $ 29,402 | $ 8,387 | $ 6,685 | $ 7,575 | $ 52,049 | |||||
| Less: Net income (loss) attributable to noncontrolling interest | 335 | 348 | (88) | 115 | 710 | |||||
| Net income attributable to City National Corporation | $ 29,067 | $ 8,039 | $ 6,773 | $ 7,460 | $ 51,339 | |||||
| Less: Dividends and accretion on preferred stock | 9,399 | 5,502 | 5,501 | 5,501 | 25,903 | |||||
| Net income available to common shareholders | $ 19,668 | $ 2,537 | $ 1,272 | $ 1,959 | $ 25,436 | |||||
| Other Data: | ||||||||||
| Earnings per common share - basic | $ 0.38 | $ 0.05 | $ 0.02 | $ 0.04 | $ 0.50 | |||||
| Earnings per common share - diluted | $ 0.38 | $ 0.05 | $ 0.02 | $ 0.04 | $ 0.50 | |||||
| Dividends paid per common share | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.25 | $ 0.55 | |||||
| Common dividend payout ratio | 26.47 % | 205.08 % | 383.66 % | 619.32 % | 107.80 % | |||||
| Return on average assets | 0.60 % | 0.18 % | 0.16 % | 0.18 % | 0.29 % | |||||
| Return on average common shareholders' equity | 4.27 % | 0.56 % | 0.29 % | 0.49 % | 1.46 % | |||||
| Net interest margin (Fully taxable-equivalent) | 3.74 % | 3.94 % | 3.98 % | 4.00 % | 3.91 % | |||||
| Full-time equivalent employees | 3,017 | 2,891 | 2,866 | 2,933 | ||||||
| Note: Certain prior period balances have been reclassified to conform to current period presentation. | ||||||||||
| CITY NATIONAL CORPORATION | ||
| CONSOLIDATED PERIOD END BALANCE SHEETS | ||
| (unaudited) | ||
| 2010 | 2009 | |
| (In thousands) |
First Quarter |
Fourth Quarter |
| Assets | ||
| Cash and due from banks | $ 293,855 | $ 364,483 |
| Federal funds sold | 50,000 | 5,000 |
| Due from banks - interest-bearing | 429,157 | 443,443 |
| Securities-available-for-sale | 3,928,481 | 4,306,758 |
| Trading securities | 68,405 | 154,302 |
| Loans and leases: | ||
| Commercial | 4,424,233 | 4,709,667 |
| Commercial real estate mortgages | 2,121,941 | 2,161,451 |
| Residential mortgages | 3,514,149 | 3,533,453 |
| Real estate construction | 730,734 | 835,589 |
| Equity lines of credit | 733,550 | 734,182 |
| Installment | 164,929 | 172,566 |
| Loans and leases, excluding covered loans | 11,689,536 | 12,146,908 |
| Covered loans | 1,803,048 | 1,851,821 |
| Total loans and leases | 13,492,584 | 13,998,729 |
| Allowance for loan and lease losses | (292,799) | (288,493) |
| Net loans and leases | 13,199,785 | 13,710,236 |
| Premises and equipment, net | 123,178 | 124,309 |
| Goodwill and other intangibles | 523,135 | 525,583 |
| Other real estate owned (1) | 135,551 | 113,866 |
| FDIC indemnification asset | 325,356 | 380,743 |
| Other assets | 989,572 | 950,034 |
| Total assets | $ 20,066,475 | $ 21,078,757 |
| Liabilities | ||
| Deposits: | ||
| Noninterest-bearing | $ 7,881,959 | $ 7,753,936 |
| Interest-bearing | 9,081,770 | 9,625,512 |
| Total deposits | 16,963,729 | 17,379,448 |
| Federal funds purchased and securities sold under repurchase agreements | 183,884 | 626,779 |
| Other short-term borrowed funds | 730 | 690 |
| Subordinated debt | 339,392 | 340,137 |
| Other long-term debt | 472,193 | 471,029 |
| Other liabilities | 196,471 | 196,529 |
| Total liabilities | 18,156,399 | 19,014,612 |
| Redeemable noncontrolling interest | 46,665 | 51,381 |
| Equity | ||
| City National Corporation shareholders' equity: | ||
| Preferred stock | -- | 196,048 |
| Common stock | 53,886 | 53,886 |
| Additional paid-in capital | 505,330 | 513,550 |
| Retained earnings | 1,382,421 | 1,377,639 |
| Accumulated other comprehensive income (loss) | 23,927 | (3,049) |
| Treasury shares | (127,342) | (151,751) |
| Total common shareholders' equity | 1,838,222 | 1,790,275 |
| Total shareholders' equity | 1,838,222 | 1,986,323 |
| Noncontrolling interest | 25,189 | 26,441 |
| Total equity | 1,863,411 | 2,012,764 |
| Total liabilities and equity | $ 20,066,475 | $ 21,078,757 |
| (1) Other real estate owned includes $77.5 million and $60.6 million covered by FDIC loss share at March 31, 2010 and December 31, 2009, respectively. | ||
| CITY NATIONAL CORPORATION | |||||||
| CONSOLIDATED PERIOD END BALANCE SHEETS | |||||||
| (unaudited) | |||||||
| 2009 | |||||||
| (In thousands) | Fourth Quarter |
Third Quarter |
Second Quarter |
First Quarter |
|||
| Assets | |||||||
| Cash and due from banks | $ 364,483 | $ 348,958 | $ 350,931 | $ 378,289 | |||
| Federal funds sold | 5,000 | 240,000 | 125,000 | 12,300 | |||
| Due from banks - interest-bearing | 443,443 | 767,362 | 205,656 | 140,484 | |||
| Securities-available-for-sale | 4,306,758 | 3,512,072 | 3,330,326 | 2,915,883 | |||
| Trading securities | 154,302 | 188,904 | 138,137 | 67,582 | |||
| Loans and leases: | |||||||
| Commercial | 4,709,667 | 4,594,683 | 4,764,755 | 4,708,627 | |||
| Commercial real estate mortgages | 2,161,451 | 2,164,398 | 2,162,294 | 2,173,983 | |||
| Residential mortgages | 3,533,453 | 3,541,534 | 3,511,598 | 3,413,538 | |||
| Real estate construction | 835,589 | 999,045 | 1,116,154 | 1,189,594 | |||
| Equity lines of credit | 734,182 | 694,660 | 691,226 | 651,127 | |||
| Installment | 172,566 | 174,170 | 175,315 | 168,245 | |||
| Loans and leases, excluding covered loans | 12,146,908 | 12,168,490 | 12,421,342 | 12,305,114 | |||
| Covered loans | 1,851,821 | -- | -- | -- | |||
| Total loans and leases | 13,998,729 | 12,168,490 | 12,421,342 | 12,305,114 | |||
| Allowance for loan and lease losses | (288,493) | (265,005) | (256,018) | (241,586) | |||
| Net loans and leases | 13,710,236 | 11,903,485 | 12,165,324 | 12,063,528 | |||
| Premises and equipment, net | 124,309 | 126,097 | 125,510 | 128,189 | |||
| Goodwill and other intangibles | 525,583 | 533,367 | 496,562 | 498,194 | |||
| Other real estate owned (1) | 113,866 | 43,969 | 18,064 | 12,639 | |||
| FDIC indemnification asset | 380,743 | -- | -- | -- | |||
| Other assets | 950,034 | 736,390 | 705,275 | 716,442 | |||
| Total assets | $ 21,078,757 | $ 18,400,604 | $ 17,660,785 | $ 16,933,530 | |||
| Liabilities | |||||||
| Deposits: | |||||||
| Noninterest-bearing | $ 7,753,936 | $ 7,441,898 | $ 7,118,660 | $ 6,611,752 | |||
| Interest-bearing | 9,625,512 | 7,666,545 | 7,379,591 | 7,077,798 | |||
| Total deposits | 17,379,448 | 15,108,443 | 14,498,251 | 13,689,550 | |||
| Federal funds purchased and securities sold under repurchase agreements | 626,779 | 231,903 | 316,388 | 519,687 | |||
| Other short-term borrowed funds | 690 | 720 | 50,000 | 28,405 | |||
| Subordinated debt | 340,137 | 341,587 | 162,434 | 164,296 | |||
| Other long-term debt | 471,029 | 233,536 | 233,456 | 242,122 | |||
| Other liabilities | 196,529 | 216,026 | 189,588 | 199,863 | |||
| Total liabilities | 19,014,612 | 16,132,215 | 15,450,117 | 14,843,923 | |||
| Redeemable noncontrolling interest | 51,381 | 49,897 | 36,752 | 40,237 | |||
| Equity | |||||||
| City National Corporation shareholders' equity: | |||||||
| Preferred stock | 196,048 | 391,593 | 391,091 | 390,590 | |||
| Common stock | 53,886 | 53,886 | 53,886 | 50,961 | |||
| Additional paid-in capital | 513,550 | 514,904 | 511,939 | 393,114 | |||
| Retained earnings | 1,377,639 | 1,363,176 | 1,365,842 | 1,369,451 | |||
| Accumulated other comprehensive income (loss) | (3,049) | 24,329 | (18,110) | (23,093) | |||
| Treasury shares | (151,751) | (154,245) | (156,119) | (157,094) | |||
| Total common shareholders' equity | 1,790,275 | 1,802,050 | 1,757,438 | 1,633,339 | |||
| Total shareholders' equity | 1,986,323 | 2,193,643 | 2,148,529 | 2,023,929 | |||
| Noncontrolling interest | 26,441 | 24,849 | 25,387 | 25,441 | |||
| Total equity | 2,012,764 | 2,218,492 | 2,173,916 | 2,049,370 | |||
| Total liabilities and equity | $ 21,078,757 | $ 18,400,604 | $ 17,660,785 | $ 16,933,530 | |||
| (1) Other real estate owned includes $60.6 million covered by FDIC loss share at December 31, 2009. | |||||||
| CITY NATIONAL CORPORATION | ||||||||||||
| CREDIT LOSS EXPERIENCE | ||||||||||||
| (unaudited) | ||||||||||||
| 2010 | 2009 | |||||||||||
| (Dollars in thousands) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Year To Date | ||||||
| Allowance for Loan and Lease Losses (1) | ||||||||||||
| Balance at beginning of period | $ 288,493 | $ 265,005 | $ 256,018 | $ 241,586 | $ 224,046 | $ 224,046 | ||||||
| Net (charge-offs)/recoveries: | ||||||||||||
| Commercial | (13,532) | (23,088) | (28,852) | (17,283) | (18,459) | (87,682) | ||||||
| Commercial real estate mortgages | (14,967) | (5,291) | (3,372) | -- | -- | (8,663) | ||||||
| Residential mortgages | (1,391) | (625) | (682) | (731) | (367) | (2,405) | ||||||
| Real estate construction | (14,183) | (27,562) | (42,651) | (36,189) | (14,049) | (120,451) | ||||||
| Equity lines of credit | (210) | (550) | (387) | (1,039) | (38) | (2,014) | ||||||
| Installment | (5,253) | (1,632) | (915) | (1,448) | (706) | (4,701) | ||||||
| Total net (charge-offs)/recoveries | (49,536) | (58,748) | (76,859) | (56,690) | (33,619) | (225,916) | ||||||
| Provision for credit losses | 55,000 | 80,000 | 85,000 | 70,000 | 50,000 | 285,000 | ||||||
| Transfers (to) from reserve for off-balance sheet credit commitments | (1,158) | 2,236 | 846 | 1,122 | 1,159 | 5,363 | ||||||
| Balance at end of period | $ 292,799 | $ 288,493 | $ 265,005 | $ 256,018 | $ 241,586 | $ 288,493 | ||||||
| Net (Charge-Offs)/Recoveries to Average Total Loans and Leases, Excluding Covered Assets (annualized): | ||||||||||||
| Commercial | (1.20) % | (1.99) % | (2.42) % | (1.47) % | (1.57) % | (1.87) % | ||||||
| Commercial real estate mortgages | (2.82) % | (0.97) % | (0.62) % | 0.00 % | 0.00 % | (0.40) % | ||||||
| Residential mortgage | (0.16) % | (0.07) % | (0.08) % | (0.08) % | (0.04) % | (0.07) % | ||||||
| Real estate construction | (7.12) % | (11.92) % | (15.68) % | (12.59) % | (4.63) % | (11.01) % | ||||||
| Equity lines of credit | (0.12) % | (0.31) % | (0.22) % | (0.62) % | (0.02) % | (0.30) % | ||||||
| Installment | (12.54) % | (3.74) % | (2.05) % | (3.33) % | (1.67) % | (2.70) % | ||||||
| Total loans and leases, excluding covered loans | (1.68) % | (1.93) % | (2.47) % | (1.84) % | (1.10) % | (1.84) % | ||||||
| Reserve for Off-Balance Sheet Credit Commitments | ||||||||||||
| Balance at beginning of period | $ 17,340 | $ 19,576 | $ 20,422 | $ 21,544 | $ 22,703 | $ 22,703 | ||||||
| Transfers from (to) allowance | 1,158 | (2,236) | (846) | (1,122) | (1,159) | (5,363) | ||||||
| Balance at end of period | $ 18,498 | $ 17,340 | $ 19,576 | $ 20,422 | $ 21,544 | $ 17,340 | ||||||
| (1) Allowance for loan and lease losses relates to total loans and leases, excluding covered loans. | ||||||||||||
| CITY NATIONAL CORPORATION | |||||
| NONPERFORMING ASSETS | |||||
| (unaudited) | |||||
| 2010 | 2009 | ||||
| (Dollars in thousands) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter |
| Nonaccrual loans | |||||
| Commercial | $ 73,838 | $ 81,989 | $ 90,744 | $ 80,372 | $ 56,246 |
| Commercial real estate mortgages | 66,194 | 76,027 | 60,833 | 36,112 | 16,923 |
| Residential mortgages | 12,045 | 15,488 | 12,961 | 17,262 | 13,270 |
| Real estate construction | 164,985 | 202,605 | 233,848 | 237,828 | 223,416 |
| Equity lines of credit | 4,089 | 3,422 | 2,507 | 2,919 | 2,432 |
| Installment | 8,865 | 9,176 | 7,373 | 3,768 | 1,354 |
| Total nonaccrual loans | 330,016 | 388,707 | 408,266 | 378,261 | 313,641 |
| Other real estate owned, excluding covered OREO | 58,025 | 53,308 | 43,969 | 18,064 | 12,639 |
| Total nonperforming assets, excluding covered assets | $ 388,041 | $ 442,015 | $ 452,235 | $ 396,325 | $ 326,280 |
| Covered assets (other real estate owned) | $ 77,526 | $ 60,558 | $ -- | $ -- | $ -- |
| Loans 90 days or more past due on accrual status, excluding covered loans | $ 1,712 | $ 5,689 | $ 10,395 | $ -- | $ 16,261 |
| Covered loans 90 days or more past due on accrual status | $ 323,620 | $ 173,309 | $ -- | $ -- | $ -- |
| Allowance for loan and lease losses as a percentage of: | |||||
| Nonaccrual loans | 88.72 % | 74.22 % | 64.91 % | 67.68 % | 77.03 % |
| Total nonperforming assets, excluding covered assets | 75.46 % | 65.27 % | 58.60 % | 64.60 % | 74.04 % |
| Total loans and leases, excluding covered loans | 2.50 % | 2.38 % | 2.18 % | 2.06 % | 1.96 % |
| Nonaccrual loans as a percentage of total loans, excluding covered loans | 2.82 % | 3.20 % | 3.36 % | 3.05 % | 2.55 % |
| Nonperforming assets, excluding covered assets, as a percentage of: | |||||
| Total loans and other real estate owned, excluding covered assets | 3.30 % | 3.62 % | 3.70 % | 3.19 % | 2.65 % |
| Total assets | 1.93 % | 2.10 % | 2.46 % | 2.24 % | 1.93 % |
| CITY NATIONAL CORPORATION | ||||||
| AVERAGE BALANCES AND RATES | ||||||
| (unaudited) | ||||||
| 2010 | 2009 | |||||
| First Quarter | Fourth Quarter | |||||
| (Dollars in millions) | Average Balance | Average Rate | Average Balance | Average Rate | ||
| Assets | ||||||
| Interest-earning assets | ||||||
| Loans and leases | ||||||
| Commercial | $ 4,559 | 4.33 % | $ 4,607 | 4.30 % | ||
| Commercial real estate mortgages | 2,151 | 5.49 | 2,163 | 5.47 | ||
| Residential mortgages | 3,522 | 5.39 | 3,534 | 5.56 | ||
| Real estate construction | 807 | 3.70 | 917 | 3.88 | ||
| Equity lines of credit | 735 | 3.56 | 706 | 3.52 | ||
| Installment | 170 | 5.14 | 173 | 5.10 | ||
| Total loans and leases, excluding covered loans | 11,944 | 4.80 | 12,100 | 4.80 | ||
| Covered loans | 1,833 | 6.44 | 264 | 6.10 | ||
| Total loans and leases | 13,777 | 5.03 | 12,364 | 4.83 | ||
| Due from banks - interest-bearing | 275 | 0.51 | 906 | 0.34 | ||
| Federal funds sold and securities purchased under resale agreements | 46 | 0.20 | 375 | 0.13 | ||
| Securities available-for-sale | 3,974 | 3.39 | 3,804 | 3.62 | ||
| Trading securities | 62 | (0.33) | 74 | 1.95 | ||
| Other interest-earning assets | 147 | 1.76 | 84 | 3.48 | ||
| Total interest-earning assets | 18,281 | 4.56 | 17,607 | 4.21 | ||
| Allowance for loan and lease losses | (295) | (276) | ||||
| Cash and due from banks | 299 | 313 | ||||
| Other non-earning assets | 1,982 | 1,451 | ||||
| Total assets | $ 20,267 | $ 19,095 | ||||
| Liabilities and Equity | ||||||
| Interest-bearing deposits | ||||||
| Interest checking accounts | $ 2,235 | 0.24 % | $ 2,027 | 0.21 % | ||
| Money market accounts | 4,853 | 0.62 | 4,093 | 0.64 | ||
| Savings deposits | 387 | 0.66 | 306 | 0.63 | ||
| Time deposits - under $100,000 | 556 | 0.62 | 293 | 0.81 | ||
| Time deposits -- $100,000 and over | 1,239 | 0.96 | 1,221 | 1.04 | ||
| Total interest-bearing deposits | 9,270 | 0.58 | 7,940 | 0.60 | ||
| Federal funds purchased and securities sold under repurchase agreements | 300 | 2.62 | 236 | 3.38 | ||
| Other borrowings | 812 | 5.73 | 639 | 4.41 | ||
| Total interest-bearing liabilities | 10,382 | 1.04 | 8,815 | 0.95 | ||
| Noninterest-bearing deposits | 7,594 | 7,790 | ||||
| Other liabilities | 288 | 249 | ||||
| Total equity | 2,003 | 2,241 | ||||
| Total liabilities and equity | $ 20,267 | $ 19,095 | ||||
| Net interest spread | 3.52 % | 3.26 % | ||||
| Net interest margin | 3.97 % | 3.74 % | ||||
| Average prime rate | 3.25 % | 3.25 % | ||||
| Note: Certain prior period balances have been reclassified to conform to current period presentation. | ||||||
| CITY NATIONAL CORPORATION | ||||||||||||||||||||
| AVERAGE BALANCES AND RATES | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| 2009 | ||||||||||||||||||||
| Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Year to Date | ||||||||||||||||
| (Dollars in millions) | Average Balance | Average Rate | Average Balance | Average Rate | Average Balance | Average Rate | Average Balance | Average Rate | Average Balance | Average Rate | ||||||||||
| Assets | ||||||||||||||||||||
| Interest-earning assets | ||||||||||||||||||||
| Loans and leases | ||||||||||||||||||||
| Commercial | $ 4,607 | 4.30 % | $ 4,724 | 4.26 % | $ 4,721 | 4.21 % | $ 4,756 | 4.22 % | $ 4,702 | 4.25 % | ||||||||||
| Commercial real estate mortgages | 2,163 | 5.47 | 2,144 | 5.49 | 2,178 | 5.69 | 2,200 | 5.74 | 2,171 | 5.60 | ||||||||||
| Residential mortgages | 3,534 | 5.56 | 3,528 | 5.50 | 3,454 | 5.51 | 3,406 | 5.58 | 3,481 | 5.54 | ||||||||||
| Real estate construction | 917 | 3.88 | 1,079 | 3.58 | 1,153 | 3.04 | 1,232 | 3.20 | 1,094 | 3.40 | ||||||||||
| Equity lines of credit | 706 | 3.52 | 687 | 3.51 | 674 | 3.46 | 630 | 3.39 | 675 | 3.47 | ||||||||||
| Installment | 173 | 5.10 | 177 | 5.08 | 174 | 5.05 | 171 | 5.12 | 174 | 5.09 | ||||||||||
| Total loans and leases, excluding covered loans | 12,100 | 4.80 | 12,339 | 4.72 | 12,354 | 4.70 | 12,395 | 4.75 | 12,297 | 4.74 | ||||||||||
| Covered assets | 264 | 6.10 | -- | 0.00 | -- | 0.00 | -- | 0.00 | 66 | 6.10 | ||||||||||
| Total loans and leases | 12,364 | 4.83 | 12,339 | 4.72 | 12,354 | 4.70 | 12,395 | 4.75 | 12,363 | 4.75 | ||||||||||
| Due from banks - interest-bearing | 906 | 0.34 | 204 | 0.50 | 195 | 0.60 | 134 | 0.47 | 362 | 0.41 | ||||||||||
| Federal funds sold and securities purchased under resale agreements | 375 | 0.13 | 338 | 0.15 | 15 | 0.23 | 11 | 0.24 | 186 | 0.14 | ||||||||||
| Securities available-for-sale | 3,804 | 3.62 | 3,560 | 4.03 | 3,252 | 4.08 | 2,302 | 4.65 | 3,234 | 4.03 | ||||||||||
| Trading securities | 74 | 1.95 | 71 | 0.18 | 112 | 1.36 | 115 | 0.19 | 93 | 0.89 | ||||||||||
| Other interest-earning assets | 84 | 3.48 | 76 | 3.76 | 75 | 3.45 | 76 | 3.48 | 77 | 3.54 | ||||||||||
| Total interest-earning assets | 17,607 | 4.21 | 16,588 | 4.40 | 16,003 | 4.49 | 15,033 | 4.67 | 16,315 | 4.43 | ||||||||||
| Allowance for loan and lease losses | (276) | (260) | (246) | (236) | (255) | |||||||||||||||
| Cash and due from banks | 313 | 308 | 324 | 335 | 320 | |||||||||||||||
| Other non-earning assets | 1,451 | 1,302 | 1,288 | 1,279 | 1,331 | |||||||||||||||
| Total assets | $ 19,095 | $ 17,938 | $ 17,369 | $ 16,411 | $ 17,711 | |||||||||||||||
| Liabilities and Equity | ||||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||
| Interest checking accounts | $ 2,027 | 0.21 % | $ 1,637 | 0.25 % | $ 1,388 | 0.29 % | $ 1,098 | 0.32 % | $ 1,541 | 0.26 % | ||||||||||
| Money market accounts | 4,093 | 0.64 | 4,232 | 0.66 | 4,111 | 0.86 | 3,897 | 1.01 | 4,084 | 0.79 | ||||||||||
| Savings deposits | 306 | 0.63 | 262 | 0.64 | 222 | 0.74 | 166 | 0.65 | 239 | 0.66 | ||||||||||
| Time deposits - under $100,000 | 293 | 0.81 | 211 | 1.05 | 221 | 1.42 | 234 | 2.22 | 240 | 1.34 | ||||||||||
| Time deposits -- $100,000 and over | 1,221 | 1.04 | 1,221 | 1.24 | 1,311 | 1.56 | 1,463 | 2.06 | 1,303 | 1.50 | ||||||||||
| Total interest-bearing deposits | 7,940 | 0.60 | 7,563 | 0.67 | 7,253 | 0.89 | 6,858 | 1.16 | 7,407 | 0.82 | ||||||||||
| Federal funds purchased and securities sold under repurchase agreements | 236 | 3.38 | 234 | 3.41 | 472 | 1.77 | 723 | 1.22 | 415 | 2.00 | ||||||||||
| Other borrowings | 639 | 4.41 | 511 | 3.27 | 494 | 1.75 | 526 | 2.20 | 542 | 3.01 | ||||||||||
| Total interest-bearing liabilities | 8,815 | 0.95 | 8,308 | 0.91 | 8,219 | 0.99 | 8,107 | 1.23 | 8,364 | 1.02 | ||||||||||
| Noninterest-bearing deposits | 7,790 | 7,214 | 6,770 | 5,983 | 6,945 | |||||||||||||||
| Other liabilities | 249 | 212 | 234 | 271 | 241 | |||||||||||||||
| Total equity | 2,241 | 2,204 | 2,146 | 2,050 | 2,161 | |||||||||||||||
| Total liabilities and equity | $ 19,095 | $ 17,938 | $ 17,369 | $ 16,411 | $ 17,711 | |||||||||||||||
| Net interest spread | 3.26 % | 3.49 % | 3.50 % | 3.44 % | 3.41 % | |||||||||||||||
| Net interest margin | 3.74 % | 3.94 % | 3.98 % | 4.00 % | 3.91 % | |||||||||||||||
| Average prime rate | 3.25 % | 3.25 % | 3.25 % | 3.25 % | 3.25 % | |||||||||||||||
| Note: Certain prior period balances have been reclassified to conform to current period presentation. | ||||||||||||||||||||
| CITY NATIONAL CORPORATION | ||||||
| CAPITAL AND CREDIT RATING DATA | ||||||
| (unaudited) | ||||||
| 2010 | 2009 | |||||
|
First Quarter |
Fourth Quarter |
Third Quarter |
Second Quarter |
First Quarter |
Year To Date | |
| Per Common Share: | ||||||
| Shares Outstanding (in thousands): | ||||||
| Average - Basic | 51,690 | 51,509 | 51,482 | 50,416 | 48,046 | 50,272 |
| Average - Diluted | 52,092 | 51,720 | 51,660 | 50,551 | 48,130 | 50,421 |
| Period-end | 51,888 | 51,536 | 51,499 | 51,471 | 48,224 | |
| Book value for common shareholders | $ 35.43 | $ 34.74 | $ 34.99 | $ 34.14 | $ 33.87 | |
| Closing price: | ||||||
| High | $ 54.86 | $ 47.32 | $ 43.80 | $ 44.14 | $ 47.76 | $ 47.76 |
| Low | 45.81 | 36.59 | 33.13 | 31.87 | 22.83 | 22.83 |
| Period-end | 53.97 | 45.60 | 38.93 | 36.83 | 33.77 | |
| Capital Ratios (Dollars in millions): | ||||||
| Risk-based capital | ||||||
| Risk-weighted assets (1) | $ 13,856 | $ 14,431 | $ 13,669 | $ 13,887 | $ 13,619 | |
| Tier 1 common shareholders' equity | $ 1,309 | $ 1,286 | $ 1,261 | $ 1,293 | $ 1,173 | |
| Percentage of risk-weighted assets (2) | 9.44 % | 8.91 % | 9.22 % | 9.31 % | 8.61 % | |
| Tier I capital | $ 1,586 | $ 1,760 | $ 1,682 | $ 1,715 | $ 1,594 | |
| Percentage of risk-weighted assets | 11.44 % | 12.20 % | 12.31 % | 12.35 % | 11.71 % | |
| Total capital | $ 1,998 | $ 2,186 | $ 2,099 | $ 1,969 | $ 1,845 | |
| Percentage of risk-weighted assets | 14.42 % | 15.15 % | 15.35 % | 14.18 % | 13.55 % | |
| Tier I leverage ratio | 8.03 % | 9.48 % | 9.66 % | 10.16 % | 10.04 % | |
| Period-end equity to period-end assets | 9.29 % | 9.55 % | 12.06 % | 12.31 % | 12.10 % | |
| Period-end common shareholders' equity to period-end assets | 9.16 % | 8.49 % | 9.79 % | 9.95 % | 9.65 % | |
| Average equity to average assets | 9.88 % | 11.73 % | 12.29 % | 12.35 % | 12.49 % | 12.20 % |
| Average common shareholders' equity to average assets | 9.10 % | 9.56 % | 9.96 % | 9.96 % | 9.96 % | 9.85 % |
| Period-end tangible equity to period-end tangible assets (2) | 6.86 % | 7.24 % | 9.43 % | 9.77 % | 9.44 % | |
| Period-end tangible common shareholders' equity to period-end tangible assets (2) | 6.73 % | 6.15 % | 7.10 % | 7.35 % | 6.91 % | |
| Average tangible equity to average tangible assets (2) | 7.49 % | 9.20 % | 9.72 % | 9.77 % | 9.75 % | 9.60 % |
| Average tangible common shareholders' equity to average tangible assets (2) | 6.68 % | 6.96 % | 7.33 % | 7.30 % | 7.14 % | 7.18 % |
| Senior Debt Credit Ratings | ||||||
| For The Period Ended March 31, 2010 | ||||||
| Moody's | Fitch | Standard & Poor's | DBRS | |||
| City National Bank | Aa3 | A-- | A-- | A (high) | ||
| City National Corporation | A1 | A-- | BBB+ | A | ||
| Notes: | ||||||
| (1) In accordance with applicable bank regulatory guidelines, the Company calculates risk-weighted assets by assigning assets and credit equivalent amounts of derivatives and off-balance sheet items to one of several broad risk categories according to the obligor, or, if relevant, the guarantor or the nature of the collateral. The aggregate dollar amount in each risk category is then multiplied by the risk weight associated with that category. The resulting weighted values from each of the risk categories are added together for determining risk-weighted assets. | ||||||
| (2) The Tier 1 common shareholders' equity to risk-weighted assets ratio, tangible equity to tangible assets ratio, and tangible common shareholders' equity to tangible assets ratio are non-GAAP financial measures. For notes on non-GAAP measures, see page 13 and 14 of the Selected Financial Information. | ||||||
| CITY NATIONAL CORPORATION | ||||||||||||
| NON-GAAP FINANCIAL MEASURES | ||||||||||||
| (unaudited) | ||||||||||||
| (a) Tangible equity and tangible common shareholders' equity ratios | ||||||||||||
| Tangible equity to tangible assets is a non-GAAP financial measure that represents total equity less identifiable intangible assets and goodwill divided by total assets less identifiable intangible assets and goodwill. Tangible common shareholders' equity to tangible assets is a non-GAAP financial measure that represents tangible equity less preferred stock and noncontrolling interest divided by total assets less identifiable intangible assets and goodwill. Management reviews both these measures in evaluating the Company's capital levels and has included these ratios in response to market participant interest in tangible equity and tangible common shareholders' equity as a measure of capital. A reconciliation of the GAAP to non-GAAP measure is set forth below: | ||||||||||||
| 2010 | 2009 | |||||||||||
| (Dollars in thousands) |
First Quarter |
Fourth Quarter |
Third Quarter |
Second Quarter |
First Quarter |
Year To Date |
||||||
| Period End: | ||||||||||||
| Total equity | $ 1,863,411 | $ 2,012,764 | $ 2,218,492 | $ 2,173,916 | $ 2,049,370 | |||||||
| Less: Goodwill and other intangibles | (523,135) | (525,583) | (533,367) | (496,562) | (498,194) | |||||||
| Tangible equity (A) | 1,340,276 | 1,487,181 | 1,685,125 | 1,677,354 | 1,551,176 | |||||||
| Less: Noncontrolling interest | (25,189) | (26,441) | (24,849) | (25,387) | (25,441) | |||||||
| Less: Preferred stock | -- | (196,048) | (391,593) | (391,091) | (390,590) | |||||||
| Tangible common shareholders' equity (B) | $ 1,315,087 | $ 1,264,692 | $ 1,268,683 | $ 1,260,876 | $ 1,135,145 | |||||||
| Total assets | $ 20,066,475 | $ 21,078,757 | $ 18,400,604 | $ 17,660,785 | $ 16,933,530 | |||||||
| Less: Goodwill and other intangibles | (523,135) | (525,583) | (533,367) | (496,562) | (498,194) | |||||||
| Tangible assets (C) | $ 19,543,340 | $ 20,553,174 | $ 17,867,237 | $ 17,164,223 | $ 16,435,336 | |||||||
| Period-end tangible equity to period-end tangible assets (A)/(C) | 6.86 % | 7.24 % | 9.43 % | 9.77 % | 9.44 % | |||||||
| Period-end tangible common shareholders' equity to period-end tangible assets (B)/(C) | 6.73 % | 6.15 % | 7.10 % | 7.35 % | 6.91 % | |||||||
| Average Balance: | ||||||||||||
| Total equity | $ 2,003,150 | $ 2,240,642 | $ 2,204,220 | $ 2,145,859 | $ 2,050,401 | $ 2,160,922 | ||||||
| Less: Goodwill and other intangibles | (524,838) | (533,314) | (510,514) | (497,487) | (499,229) | (510,230) | ||||||
| Tangible equity (D) | 1,478,312 | 1,707,328 | 1,693,706 | 1,648,372 | 1,551,172 | 1,650,692 | ||||||
| Less: Noncontrolling interest | (26,427) | (24,815) | (25,369) | (25,438) | (25,441) | (25,264) | ||||||
| Less: Preferred stock | (132,915) | (389,688) | (391,353) | (390,838) | (390,348) | (390,557) | ||||||
| Tangible common shareholders' equity (E) | $ 1,318,970 | $ 1,292,825 | $ 1,276,984 | $ 1,232,096 | $ 1,135,383 | $ 1,234,871 | ||||||
| Total assets | $ 20,267,248 | $ 19,095,212 | $ 17,938,231 | $ 17,369,311 | $ 16,411,240 | $ 17,711,495 | ||||||
| Less: Goodwill and other intangibles | (524,838) | (533,314) | (510,514) | (497,487) | (499,229) | (510,230) | ||||||
| Tangible assets (F) | $ 19,742,410 | $ 18,561,898 | $ 17,427,717 | $ 16,871,824 | $ 15,912,011 | $ 17,201,264 | ||||||
| Average tangible equity to average tangible assets (D)/(F) | 7.49 % | 9.20 % | 9.72 % | 9.77 % | 9.75 % | 9.60 % | ||||||
| Average tangible common shareholders' equity to average tangible assets (E)/(F) | 6.68 % | 6.96 % | 7.33 % | 7.30 % | 7.14 % | 7.18 % | ||||||
| CITY NATIONAL CORPORATION | |||||||||||
| NON-GAAP FINANCIAL MEASURES (continued) | |||||||||||
| (unaudited) | |||||||||||
| (b) Tier 1 common shareholders' equity to risk-based assets | |||||||||||
| The Tier 1 common shareholders' equity to risk-based assets ratio, also known as Tier 1 common ratio, is calculated by dividing (a) Tier 1 capital less non-common components including qualifying perpetual preferred stock, qualifying noncontrolling interest in subsidiaries and qualifying trust preferred securities by (b) risk-weighted assets. Tier 1 capital and risk-weighted assets are calculated in accordance with applicable bank regulatory guidelines. This ratio is a non-GAAP measure that is used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies. Management reviews this measure in evaluating the Company's capital levels and has included these ratios in response to market participant interest in the Tier 1 common shareholders' equity to risk-based assets ratio. | |||||||||||
| 2010 | 2009 | ||||||||||
| (Dollars in thousands) |
First Quarter |
Fourth Quarter |
Third Quarter |
Second Quarter |
First Quarter |
||||||
| Tier 1 capital | $ 1,585,727 | $ 1,760,136 | $ 1,682,155 | $ 1,714,912 | $ 1,594,371 | ||||||
| Less: Preferred stock | -- | (196,048) | (391,593) | (391,091) | (390,590) | ||||||
| Less: Noncontrolling interest | (25,088) | (26,339) | (24,748) | (25,387) | (25,441) | ||||||
| Less: Trust preferred securities | (252,062) | (252,036) | (5,155) | (5,155) | (5,155) | ||||||
| Tier 1 common shareholders' equity (A) | $ 1,308,577 | $ 1,285,713 | $ 1,260,659 | $ 1,293,279 | $ 1,173,185 | ||||||
| Risk-weighted assets (B) | $ 13,856,028 | $ 14,430,857 | $ 13,669,051 | $ 13,886,674 | $ 13,618,545 | ||||||
| Tier 1 common shareholders' equity to risk-based assets (A)/(B) | 9.44 % | 8.91 % | 9.22 % | 9.31 % | 8.61 % | ||||||
| (c) Operating Revenue | |||||||||||
| Operating revenue (excluding securities transactions) is a non-GAAP financial measure that represents total revenue less gains and losses on securities. Management reviews operating revenue in evaluating the Company's financial performance and believes that it enhances the comparability of the financial results with prior periods. | |||||||||||
| Total revenue for the first quarter of 2010 was $252.4 million, an increase of 31 percent from $192.2 million of total revenue in the first quarter of 2009. Operating revenue, which excludes net gains on securities of $1.1 million for the first quarter of 2010 and net losses on securities of $15.0 million for the first quarter of 2009, was $251.2 million and $207.2 million for the first quarter of 2010 and 2009, respectively. Operating revenue increased 21 percent from the first quarter of 2009. | |||||||||||