updated 4/21/2011 4:17:01 PM ET 2011-04-21T20:17:01

Revenue grows 9 percent from first-quarter 2010

Average core deposits grow 11 percent to $17.4 billion

Credit quality improves for sixth consecutive quarter

LOS ANGELES, April 21, 2011 (GLOBE NEWSWIRE) -- City National Corporation (NYSE:CYN), the parent company of wholly owned City National Bank, today reported first-quarter 2011 net income of $39.7 million, or $0.74 per share. In the first quarter of 2010, net income was $15.7 million, while net income available to common shareholders was $10.0 million, or $0.19 per share.

City National also announced today that its Board of Directors has maintained and approved a quarterly common stock cash dividend of $0.20 per share. The company's dividend will be payable on May 18, 2011 to stockholders of record on May 4, 2011.

FIRST-QUARTER 2011 HIGHLIGHTS

  • City National's first-quarter revenue totaled $275.2 million, up 9 percent from the first quarter of 2010.
  • Fully taxable-equivalent net interest income amounted to $185.5 million, up 4 percent from the same period last year.
  • Average first-quarter deposit balances reached $18.2 billion, an increase of 8 percent from the first quarter of 2010. Average core deposits were $17.4 billion, up 11 percent from the year-ago period. They now equal 95 percent of the company's average deposit balances.
  • Average first-quarter loan balances, excluding loans covered by City National's loss-sharing agreements with the FDIC, were $11.3 billion, down 6 percent from the same period last year. However, average commercial loan balances grew 1 percent from the fourth quarter of 2010.
  • Year-over-year credit trends showed strong improvement. In the first quarter of 2011, City National realized $6.5 million in net recoveries, compared with net charge-offs of $49.5 million in the first quarter of 2010 and $19.0 million in the fourth quarter of last year. Nonperforming assets, excluding FDIC-covered assets, declined 45 percent from the first quarter of 2010 and 14 percent from the fourth quarter. Nonperforming assets now amount to less than 2 percent of total loans.
  • Excluding loans covered by FDIC loss-sharing agreements, first-quarter results included no provision for credit losses. City National recorded a $55.0 million provision in the first quarter of 2010 and a $3.0 million provision in the fourth quarter.  The company remains well-reserved at 2.34 percent of total loans, excluding FDIC-covered loans.
  • Investment assets under management or administration exceeded $60 billion for the first time.

"City National delivered another solid performance in the first quarter of 2011," said President and Chief Executive Officer Russell Goldsmith. "Credit quality was stronger than it has been in several years. Average commercial loans again increased modestly, but year-over-year core deposit growth continued at a strong double-digit rate. 

"The company continues to expand. With the recent addition of a second office in San Jose and the FDIC-assisted acquisition of Nevada Commerce Bank, we now operate 79 banking offices, including 11 in the San Francisco Bay Area.

"Backed by strong credit reserves and capital ratios, City National continues to grow and improve by hiring talented new colleagues, lending to creditworthy borrowers, and expanding its wealth management business. We have avoided the subprime lending and foreclosure-related problems that have hurt some of our competitors. The company today is stronger and better able than ever to serve its clients, and is well-positioned in this gradually recovering economy."

  For the three months ended   For the three  
Dollars in millions, March 31, % months ended %
except per share 2011 2010 Change December 31, 2010 Change
Earnings Per Share  $ 0.74  $ 0.19 289  $ 0.74 0
           
Net Income Attributable to CNC  $ 39.7  $ 15.7 153  $ 39.7 (0)
Less: Dividends and Accretion on Preferred Stock  --   5.7 (100)  --  NM
Net Income Available to Common Shareholders  $ 39.7  $ 10.0 297  $ 39.7 (0)
           
Average Assets  $ 21,377.9  $ 20,267.2 5  $ 21,922.2 (2)
Return on Average Assets  0.75  0.31 % 142  0.72 % 4
Return on Average Common Shareholders' Equity  8.16  2.20 % 271  7.99 % 2

ASSETS

Total assets at March 31, 2011 were $21.6 billion, up 8 percent from the first quarter of 2010 and 1 percent from the fourth quarter of last year.

REVENUE

Revenue for the first quarter of 2011 was $275.2 million, up 9 percent from the first quarter of 2010 but down 2 percent from the fourth quarter of last year.

NET INTEREST INCOME

Fully taxable-equivalent net interest income was $185.5 million in the first quarter of 2011, up 4 percent from the first quarter of 2010 but down 1 percent from the fourth quarter of last year.

First-quarter average deposits were up 8 percent to $18.2 billion from the same period of 2010, but were down 3 percent from the fourth quarter of last year. The decline was a reflection of traditional seasonal business patterns. Average core deposits were $17.4 billion in the first quarter of 2011, up 11 percent from the same period of 2010 but down 2 percent from the fourth quarter.  Core deposits now represent 95 percent of the company's average balances.

First-quarter average noninterest-bearing deposits were up 12 percent from the same period of 2010 but down 2 percent from the fourth quarter of last year.

Treasury Services deposit balances, which consist primarily of title, escrow, community association and property management deposits, averaged $1.5 billion in the first quarter of 2011, up 40 percent from the same period of 2010 but down 1 percent from the fourth quarter of last year. The increase from the year-ago period was due largely to the addition of new clients and an increase in residential and commercial real estate activity by the company's title and escrow clients.

First-quarter average loans, excluding FDIC-covered loans, were $11.3 billion, down 6 percent from the first quarter of 2010 and just 1 percent from the fourth quarter of last year. The declines reflect moderate loan demand, as well as the company's continued progress in reducing the number of problem loans.

First-quarter average balances for commercial loans were down 3 percent from the same period last year but up 1 percent from the fourth quarter of 2010. Average balances for commercial real estate and construction loans together were down 20 percent from the year-ago first quarter and 5 percent from the fourth quarter of 2010.  Average balances for single-family residential mortgage loans, nearly all of which are made to City National's private banking clients, were up 1 percent from the year-ago period but virtually unchanged from the fourth quarter of 2010.

Average securities for the first quarter of 2011 totaled $5.7 billion, up 41 percent from the same period last year and 5 percent from the fourth quarter of 2010. The increase from the first quarter of last year reflects strong deposit increases and relatively low loan growth. The average duration of total available-for-sale securities at March 31, 2011 was 2.7 years, down from 2.9 years at the end of the first quarter of 2010 and 2.8 years at year end.

City National's net interest margin in the first quarter of 2011 averaged 3.84 percent, down from 3.97 percent in the first quarter of 2010 but up from 3.71 percent in the fourth quarter of 2010. The decline from the year-ago period was due primarily to strong growth in deposits, which were invested in securities available-for-sale and other liquid assets, as well as lower loan balances. The increase from the fourth quarter of 2010 reflects increased yield on covered loans as well as a seasonal decline in average deposit balances that had been invested in lower-yielding, short-term deposits.

First-quarter net interest income included $7.4 million from FDIC-covered loans that were repaid or charged off during the quarter.  This compares with $7.0 million of such income in the fourth quarter of 2010.

At March 31, 2011, City National's prime lending rate was 3.25 percent, unchanged from both March 31, 2010 and December 31, 2010.

  For the three months ended   For the three  
  March 31, % months ended %
Dollars in millions 2011 2010 Change December 31, 2010 Change
Average Loans and Leases,          
 excluding Covered Loans  $ 11,255.9  $ 11,944.3 (6)  $ 11,372.5 (1)
Average Covered Loans  1,811.0  1,833.1 (1)  1,907.9 (5)
Average Total Securities   5,693.3  4,036.4 41  5,430.2 5
Average Earning Assets  19,620.9  18,281.0 7  20,125.9 (3)
Average Deposits  18,183.6  16,864.2 8  18,687.2 (3)
Average Core Deposits  17,361.1  15,625.3 11  17,722.2 (2)
Fully Taxable-Equivalent          
Net Interest Income  185.5  178.8 4  188.3 (1)
Net Interest Margin  3.84 %  3.97 % (3)  3.71%   4

COVERED ASSETS

Loans and OREO assets acquired in City National's FDIC-assisted acquisitions totaled $1.8 billion at the end of the first quarter of 2011, compared with $1.9 billion at both March 31, 2010 and December 31, 2010. 

In the first quarter of 2011, the company recorded a $4.3 million non-cash net loss to reflect results of the quarterly update of cash-flow projections for FDIC-covered loans. The loss reflected a provision for loan losses of $19.1 million for covered loans and a corresponding $14.8 million of other income from City National's loss-sharing agreements with the FDIC. City National will continue to update the cash-flow projections for covered loans on a quarterly basis. Due to the uncertainty in the future performance of the covered loans, additional impairments or gains may be recognized in the future.

NONINTEREST INCOME

Noninterest income was $93.9 million in the first quarter of 2011, up 22 percent from the year-ago period but down 1 percent from the fourth quarter of last year. First-quarter 2011 results included $8.6 million of FDIC loss-sharing income, compared to $9.1 million in the first quarter of last year and $26.3 million in the fourth quarter of 2010.

At March 31, 2011, noninterest income accounted for 34 percent of City National's total revenue, up from 30 percent at March 31, 2010.

Wealth Management

City National's assets under management totaled $37.9 billion as of March 31, 2011, up 6 percent from the same period of 2010 and 3 percent from the fourth quarter of last year. The increases were due primarily to higher equity market values.

Trust and investment fees were $35.6 million, up 6 percent from the first quarter of 2010 and 3 percent from the fourth quarter of last year. Money market mutual fund and brokerage fees totaled $5.7 million, up 7 percent from the first quarter of 2010 but down 13 percent from the fourth quarter of last year. The decline in money market mutual fund and brokerage fees from the prior quarter was due primarily to the impact of low short-term interest rates.

  At or for the    At or for the  
  three months ended   three months  
  March 31, % ended %
Dollars in millions 2011 2010 Change December 31, 2010 Change
           
Trust and Investment Fee Revenue  $ 35.6  $ 33.5 6  $ 34.5 3
Brokerage and Mutual Fund Fees  5.7  5.3 7  6.5 (13)
Assets Under Management (1)  37,852.5  35,783.4 6  36,753.7 3
Assets Under Management          
or Administration (1)  60,113.1  55,844.3 8  58,470.8 3
           
(1) Excludes $20.4 billion, $21.3 billion, and $14.8 billion of assets under management for asset managers in which City National   
 held a noncontrolling ownership interest as of March 31, 2011, December 31, 2010, and March 31, 2010, respectively.    

Other Noninterest Income

First-quarter income from cash management and deposit transaction fees totaled $11.7 million, down 7 percent from the same period of last year, but up 3 percent from the fourth quarter of 2010. The year-over-year decline was due to higher deposit balances used to offset service charge fees.

Fee income from foreign exchange services and letters of credit totaled $8.3 million in the first quarter, up 28 percent from the year-earlier period but down 2 percent from the fourth quarter of last year.  The increase from the first quarter of 2010 was due to greater demand for foreign exchange services, as well as the addition of new export trade finance clients and increased volume from existing clients.

Other income was $21.6 million in the first quarter, up 192 percent from the year-ago period, due primarily to FDIC-acquired bank activity. The 137 percent increase from the fourth quarter of 2010 reflected fourth-quarter pretax charges of $6.8 million for the redemption of trust preferred securities and $5.9 million related to one of the company's affiliated investment advisors.

NONINTEREST EXPENSE

City National's first-quarter noninterest expense amounted to $197.4 million, up 12 percent from the first quarter of 2010 but down 3 percent from the fourth quarter of last year. The company added a net total of 275 colleagues from the first quarter of 2010 through the first quarter of this year. Year-over-year expense growth was due largely to increased compensation costs, higher FDIC assessments, the resolution of two dispute-related legal claims, and increased legal and professional fees. Many of the qualified covered asset-related expenses are reimbursed by the FDIC and reflected in noninterest income.

CREDIT QUALITY

The following credit quality information excludes loans that are subject to loss-sharing agreements involving three of City National's FDIC-assisted acquisitions:

The company realized net recoveries of $6.5 million in the first quarter of 2011, or 0.24 percent of average total loans and leases on an annualized basis. Net charge-offs were $49.5 million, or 1.68 percent of total loans and leases, in the first quarter of 2010 and $19.0 million, or 0.66 percent, in the fourth quarter of 2010.

At March 31, 2011, nonperforming assets amounted to $213.7 million, or 1.89 percent of the company's total loans and leases and other real estate owned, down 45 percent from the first quarter of last year. Nonperforming assets totaled $388.0 million, or 3.30 percent, at March 31, 2010, and $248.2 million, or 2.17 percent, at December 31, 2010. Nonaccrual loans at March 31, 2011 were $157.4 million, down from $330.0 million at March 31, 2010 and $190.9 million at December 31, 2010.

  As of As of As of
  March 31, 2011 December 31, 2010 March 31, 2010
Period-end Loans (in millions) Total Nonaccrual Total Nonaccrual Total Nonaccrual
             
Commercial $ 4,468.2 $ 18.2 $ 4,514.3 $ 20.6 $ 4,424.2 $ 73.8
Commercial Real Estate Mortgages  1,902.9  28.0  1,958.3  44.9  2,121.9  66.2
Residential Mortgages  3,603.0  14.5  3,552.3  18.7  3,514.2  12.0
Real Estate Construction  415.2  81.5  467.8  98.2  730.7  165.0
Equity Lines of Credit  733.6  6.7  733.7  6.8  733.6  4.1
Other Loans  146.8  8.5  160.2  1.7  164.9  8.9
 Total Loans (1) $ 11,269.7 $ 157.4 $ 11,386.6 $ 190.9 $ 11,689.5 $ 330.0
             
Other Real Estate Owned (1)    56.3    57.3    58.0
Total Nonperforming Assets, excluding            
 Covered Assets   $ 213.7   $ 248.2   $ 388.0
             
(1) Excludes covered loans, net of allowance, of $1.7 billion, $1.8 billion and $1.8 billion at March 31, 2011, December 31, 2010 and    
 March 31, 2010, respectively, and covered other real estate owned of $121.8 million, $120.9 million and $77.5 million at      
 March 31, 2011, December 31, 2010 and March 31, 2010, respectively.          

City National recorded no provision in the first quarter of 2011. The company recorded provisions of $55.0 million in the first quarter of 2010 and $3.0 million in the fourth quarter of last year.

At March 31, 2011, City National's allowance for loan and lease losses amounted to $263.4 million, or 2.34 percent of total loans and leases. That compares with $292.8 million, or 2.50 percent, at the end of the first quarter of 2010 and $257.0 million, or 2.26 percent, at December 31, 2010. The company also maintains an additional $21.7 million in reserves for off-balance-sheet credit commitments.

Commercial Loans

First-quarter net charge-offs of commercial loans were $1.4 million, down from $17.6 million in the year-earlier period and $6.5 million in the fourth quarter of 2010.

Commercial loans on nonaccrual totaled $18.2 million at March 31, 2011, compared to $73.8 million at March 31, 2010, and $20.6 million at the end of 2010.

Construction Loans

City National's $415.2 million commercial real estate construction portfolio includes secured loans to developers of residential and nonresidential properties. This portfolio has been reduced 43 percent since March 31, 2010, and construction loans now account for 4 percent of the company's total loans.

First-quarter net recoveries of construction loans were $3.8 million, compared to net charge-offs of $14.2 million in the first quarter of 2010 and $5.5 million in the fourth quarter of 2010. At March 31, 2011, construction loans on nonaccrual totaled $81.4 million, down from $165.0 million at March 31, 2010 and $98.2 million at December 31, 2010.

Commercial Real Estate Mortgage Loans

First-quarter net recoveries in the company's $1.9 billion commercial real estate mortgage portfolio were $6.2 million, compared to net charge-offs of $15.0 million at March 31, 2010, and $5.3 million in the fourth quarter of 2010. Commercial real estate mortgage loans on nonaccrual totaled $28.0 million at March 31, 2011, compared with $66.2 million at March 31, 2010 and $44.9 million at December 31, 2010.

Residential Mortgage Loans

City National's $3.6 billion residential mortgage portfolio and $733.6 million home-equity portfolio continued to perform well.  First-quarter net charge-offs were $1.4 million, compared to $1.6 million in the first quarter of 2010 and $1.3 million in the fourth quarter of 2010. Residential mortgage and home equity loans on nonaccrual were $21.2 million at the end of the first quarter, up from $16.1 million in the year-earlier period but down from $25.5 million in the fourth quarter of 2010.

INCOME TAXES

City National's effective tax rate for the first quarter of 2011 was 30.5 percent, compared to 20.6 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 2011 with a Tier 1 common shareholders' equity ratio of 10.7 percent, compared to 9.4 percent at March 31, 2010 and 10.3 percent at December 31, 2010.[1]

Total risk-based capital and Tier 1 risk-based capital ratios at March 31, 2011 were 13.7 percent and 10.9 percent, respectively.  City National's Tier 1 leverage ratio at March 31, 2011 was 7.1 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, 2010 were 13.3 percent, 10.5 percent and 6.7 percent, respectively.

The period-end ratio of shareholders' equity to total assets at March 31, 2011 was 9.3 percent, unchanged from both March 31, 2010 and December 31, 2010.

2011 OUTLOOK

City National's management continues to anticipate increased profitability in 2011, as asset quality continues to improve and annual credit costs move lower (excluding provisions related to FDIC-covered loans). However, it is likely that moderate economic growth, limited loan demand and the continuing decline of covered assets will limit overall average loan growth. Low interest rates will continue to place modest pressure on the company's net interest margin and wealth management income. Management expects to increase the company's already-strong capital ratios in 2011.

CONFERENCE CALL

City National Corporation will host a conference call this afternoon to discuss first-quarter 2011 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 53596171.  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 offices in Southern California, the San Francisco Bay Area, Nevada and New York City.  The company and its consolidated investment affiliates manage or administer $60.1 billion in client assets, including nearly $38 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.

A number of factors, many of which are beyond the Company's ability to control or predict, could cause future results to differ materially from those contemplated by such forward-looking statements. These factors include (1) changes in general economic, political or industry conditions and the related credit and market conditions, (2) changes in the pace of economic recovery and related changes in employment levels, (3) the effect of the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the new rules and regulations to be promulgated by supervisory and oversight agencies implementing the new legislation, taking into account that the precise timing, extent and nature of such rules and regulations and the impact on the Company is uncertain, (4) significant changes in applicable laws and regulations, including those concerning taxes, banking and securities, (5) volatility in the municipal bond market, (6) changes in the level of nonperforming assets, charge-offs, other real estate owned and provision expense, (7) incorrect assumptions in the value of the loans acquired in FDIC-assisted acquisitions resulting in greater than anticipated losses in the acquired loan portfolios exceeding the losses covered by the loss-sharing agreements with the FDIC, (8) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board, (9) changes in inflation, interest rates, and market liquidity which may impact interest margins and impact funding sources, (10) adequacy of the Company's enterprise risk management framework, (11) the Company's ability to increase market share and control expenses, (12) the Company's ability to attract new employees and retain and motivate existing employees, (13) increased competition in the Company's markets, (14) changes in the financial performance and/or condition of the Company's borrowers, including adverse impact on loan utilization rates, delinquencies, defaults and customers' ability to meet certain credit obligations, changes in customers' suppliers, and other counterparties' performance and creditworthiness, (15) 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, (16) changes in consumer spending, borrowing and savings habits, (17) soundness of other financial institutions which could adversely affect the Company, (18) protracted labor disputes in the Company's markets, (19) earthquake, fire or other natural disasters affecting the condition of real estate collateral, (20) the effect of acquisitions and integration of acquired businesses and de novo branching efforts, (21) the impact of changes in regulatory, judicial or legislative tax treatment of business transactions, (22) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies, and (23) the success of the Company at managing the risks involved in the foregoing. Forward-looking statements speak only as of the date they are made, and the company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the statements are made, or to update earnings guidance, including the factors that influence earnings.

For a more complete discussion of these risks and uncertainties, see the Company's Annual Report on Form 10-K for the year ended December 31, 2010 and particularly, Item 1A, titled "Risk Factors."

[1] For notes on non-GAAP measures, see pages 14 and 15 of the Selected Financial Information.

CITY NATIONAL CORPORATION
FINANCIAL HIGHLIGHTS
(unaudited)
  Three Months
For The Period Ended March 31, 2011 2010 % Change
Per Common Share      
Net income available to common shareholders      
Basic  $ 0.75  $ 0.19  295
Diluted  0.74  0.19  289
Dividends  0.20  0.10  100
Book value  37.86  35.43  7
       
Results of Operations: (In millions)      
Interest income $ 201 $ 202  (1)
Interest expense 20 26  (27)
Net interest income 181 176  3
Net interest income (Fully taxable-equivalent) 186 179  4
Total revenue 275 252  9
Provision for credit losses on loans and leases, excluding covered loans  -- 55  (100)
Provision for losses on covered loans 19  --  NM 
Net income attributable to City National Corporation 40 16  153
Net income available to common shareholders 40 10  297
       
Financial Ratios:      
Performance Ratios:      
Return on average assets 0.75% 0.31%  
Return on average common shareholders' equity  8.16  2.20  
Period-end equity to period-end assets  9.29  9.29  
Net interest margin  3.84  3.97  
Expense to revenue ratio  65.62  62.24  
Capital Adequacy Ratios (Period-end):      
Tier 1 leverage  7.09  8.03  
Tier 1 risk-based capital  10.91  11.44  
Total risk-based capital  13.68  14.42  
       
Asset Quality Ratios:      
Allowance for loan and lease losses to:      
Total loans and leases, excluding covered loans 2.34% 2.50%  
Nonaccrual loans  167.32  88.72  
Nonperforming assets, excluding covered assets, to:      
Total loans and leases and other real estate owned, excluding covered assets  1.89  3.30  
Total assets  0.99  1.93  
Net recoveries (charge-offs) to average total loans and leases, excluding covered loans (annualized) 0.24% (1.68)%  
       
Average Balances: (In millions)      
Loans and leases, excluding covered loans  $ 11,256  $ 11,944  (6)
Covered loans 1,811 1,833  (1)
Securities 5,693 4,036  41
Interest-earning assets 19,621 18,281  7
Assets 21,378 20,267  5
Core deposits 17,361 15,625  11
Deposits 18,184 16,864  8
Interest-bearing liabilities 10,533 10,382  1
Common shareholders' equity 1,973 1,844  7
Total equity 1,998 2,003  (0)
       
Period-End Balances: (In millions)      
Loans and leases, excluding covered loans $ 11,270  $ 11,690  (4)
Covered loans 1,766 1,803  (2)
Securities 5,931 3,997  48
Assets 21,636 20,066  8
Core deposits 17,671 15,829  12
Deposits 18,478 16,964  9
Common shareholders' equity 1,986 1,838  8
Total equity 2,011 1,863  8
       
Wealth Management: (In millions) (1)      
Assets under management $ 37,852 $ 35,783  6
Assets under management or administration 60,113 55,844  8
       
(1) Excludes $20.4 billion and $14.8 billion of assets under management for asset managers in which City National held a noncontrolling ownership interest as of March 31, 2011 and March 31, 2010, respectively.
CITY NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
  Three Months Ended
(Dollars in thousands March 31,
except per share data) 2011 2010 % Change
Interest income  $ 200,810  $202,066  (1)
Interest expense  19,520  26,561  (27)
Net Interest Income  181,290  175,505  3
       
Provision for credit losses on loans and leases, excluding covered loans  --  55,000  (100)
Provision for losses on covered loans  19,116  --  NM 
       
Noninterest Income      
Trust and investment fees  35,638  33,509  6
Brokerage and mutual fund fees  5,661  5,281  7
Cash management and deposit transaction fees  11,725  12,576  (7)
International services  8,316  6,508  28
FDIC loss sharing income, net  8,605  9,086  (5)
(Loss) gain on securities  (34)  1,131  (103)
Gain on disposal of assets  2,424  1,391  74
Other  21,558  7,391  192
Total noninterest income  93,893  76,873  22
       
Noninterest Expense      
Salaries and employee benefits  111,012  95,459  16
Net occupancy of premises  13,346  12,905  3
Legal and professional fees  10,077  9,183  10
Information services  7,497  7,516  (0)
Depreciation and amortization  6,748  6,347  6
Amortization of intangibles  2,168  2,447  (11)
Marketing and advertising  6,518  5,248  24
Office services and equipment  4,606  3,798  21
Other real estate owned  14,489  17,197  (16)
FDIC assessments  9,806  6,521  50
Other  11,130  9,313  20
Total noninterest expense  197,397  175,934  12
       
Income Before Taxes  58,670  21,444  174
       
Applicable Income Taxes  17,886  4,418  305
       
Net Income  $ 40,784  $ 17,026  140
       
Less: Net income attributable to noncontrolling interest  1,092  1,328  (18)
       
Net income attributable to City National Corporation  $ 39,692  $ 15,698  153
       
Less: Dividends and accretion on preferred stock  --  5,702  (100)
       
Net income available to common shareholders  $ 39,692  $ 9,996  297
       
Other Data:      
Earnings per common share - basic  $ 0.75  $ 0.19  295
Earnings per common share - diluted  $ 0.74  $ 0.19  289
Dividends paid per common share  $ 0.20  $ 0.10  100
Common dividend payout ratio 26.65% 52.16%  (49)
Return on average assets 0.75% 0.31%  142
Return on average common shareholders' equity 8.16% 2.20%  271
Net interest margin (Fully taxable-equivalent) 3.84% 3.97%  (3)
Full-time equivalent employees  3,258  2,983  9
       
Note: Certain prior period balances have been reclassified to conform to current period presentation.
 
CITY NATIONAL CORPORATION
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(unaudited)    
  2011 2010
(Dollars in thousands First Fourth
except per share data) Quarter Quarter
Interest income  $200,810  $206,266
Interest expense  19,520  21,160
Net Interest Income  181,290  185,106
     
Provision for credit losses on loans and leases, excluding covered loans  --  3,000
Provision for losses on covered loans  19,116  21,469
     
Noninterest Income    
Trust and investment fees  35,638  34,547
Brokerage and mutual fund fees  5,661  6,506
Cash management and deposit transaction fees  11,725  11,389
International services  8,316  8,510
FDIC loss sharing income, net  8,605  26,287
Loss on securities  (34)  (2,917)
Gain on disposal of assets  2,424  1,657
Other  21,558  9,089
Total noninterest income  93,893  95,068
     
Noninterest Expense    
Salaries and employee benefits  111,012  111,857
Net occupancy of premises  13,346  14,852
Legal and professional fees  10,077  14,071
Information services  7,497  7,830
Depreciation and amortization  6,748  6,784
Amortization of intangibles  2,168  2,233
Marketing and advertising  6,518  7,112
Office services and equipment  4,606  4,276
Other real estate owned  14,489  16,380
FDIC assessments  9,806  7,311
Other  11,130  11,322
Total noninterest expense  197,397  204,028
     
Income Before Taxes  58,670  51,677
     
Applicable Income Taxes  17,886  11,035
     
Net Income  $ 40,784  $ 40,642
     
Less: Net income attributable to noncontrolling interest  1,092  899
     
Net income attributable to City National Corporation   $ 39,692  $ 39,743
     
Other Data:    
Earnings per common share - basic  $ 0.75  $ 0.75
Earnings per common share - diluted  $ 0.74  $ 0.74
Dividends paid per common share  $ 0.20  $ 0.10
Common dividend payout ratio 26.65% 13.27%
Return on average assets 0.75% 0.72%
Return on average common shareholders' equity 8.16% 7.99%
Net interest margin (Fully taxable-equivalent) 3.84% 3.71%
Full-time equivalent employees  3,258  3,178
     
Note: Certain prior period balances have been reclassified to conform to current period presentation.
 
CITY NATIONAL CORPORATION
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(unaudited)
  2010
(Dollars in thousands Fourth Third Second First Year to
except per share data) Quarter Quarter Quarter Quarter Date
Interest income  $ 206,266  $ 214,061  $ 207,803  $ 202,066  $ 830,196
Interest expense  21,160  26,345  25,805  26,561  99,871
Net Interest Income  185,106  187,716  181,998  175,505  730,325
           
Provision for credit losses on loans and leases, excluding covered loans  3,000  13,000  32,000  55,000  103,000
Provision for losses on covered loans  21,469  8,233  46,516  --  76,218
           
Noninterest Income          
Trust and investment fees  34,547  32,695  33,976  33,509  134,727
Brokerage and mutual fund fees  6,506  6,494  5,461  5,281  23,742
Cash management and deposit transaction fees  11,389  11,620  12,008  12,576  47,593
International services  8,510  7,905  8,374  6,508  31,297
FDIC loss sharing income, net  26,287 (377)  28,339  9,086  63,335
(Loss) gain on securities (2,917)  299 (151)  1,131 (1,638)
Gain (loss) on disposal of assets  1,657  2,603 (2,814)  1,391  2,837
Gain on acquisition  --  2,111  25,228  --  27,339
Other  9,089  3,448  12,215  7,391  32,143
Total noninterest income  95,068  66,798  122,636  76,873  361,375
           
Noninterest Expense          
Salaries and employee benefits  111,857  103,397  99,110  95,459  409,823
Net occupancy of premises  14,852  14,463  13,347  12,905  55,567
Legal and professional fees  14,071  10,633  13,754  9,183  47,641
Information services  7,830  7,940  7,538  7,516  30,824
Depreciation and amortization  6,784  6,351  6,363  6,347  25,845
Amortization of intangibles  2,233  2,228  2,128  2,447  9,036
Marketing and advertising  7,112  4,954  5,798  5,248  23,112
Office services and equipment  4,276  4,035  4,272  3,798  16,381
Other real estate owned  16,380  12,642  16,892  17,197  63,111
FDIC assessments  7,311  7,561  7,662  6,521  29,055
Other  11,322  10,477  9,823  9,313  40,935
Total noninterest expense  204,028  184,681  186,687  175,934  751,330
           
Income Before Taxes  51,677  48,600  39,431  21,444  161,152
           
Applicable Income Taxes  11,035  13,461 (2,859)  4,418  26,055
           
Net Income  $ 40,642  $ 35,139  $ 42,290  $ 17,026  $ 135,097
           
Less: Net income attributable to noncontrolling interest  899  721  972  1,328  3,920
           
Net income attributable to City National Corporation  $ 39,743  $ 34,418  $ 41,318  $ 15,698  $ 131,177
           
Less: Dividends and accretion on preferred stock  --  --  --  5,702  5,702
           
Net income available to common shareholders  $ 39,743  $ 34,418  $ 41,318  $ 9,996  $ 125,475
           
Other Data:          
Earnings per common share - basic  $ 0.75  $ 0.65  $ 0.78  $ 0.19  $ 2.38
Earnings per common share - diluted  $ 0.74  $ 0.65  $ 0.78  $ 0.19  $ 2.36
Dividends paid per common share  $ 0.10  $ 0.10  $ 0.10  $ 0.10  $ 0.40
Common dividend payout ratio 13.27% 15.31% 12.71% 52.16% 16.75%
Return on average assets 0.72% 0.63% 0.80% 0.31% 0.62%
Return on average common shareholders' equity 7.99% 7.06% 8.93% 2.20% 6.59%
Net interest margin (Fully taxable-equivalent) 3.71% 3.84% 3.93% 3.97% 3.86%
Full-time equivalent employees  3,178  3,195  3,144 2,983  
           
Note: Certain prior period balances have been reclassified to conform to current period presentation.
     
CITY NATIONAL CORPORATION    
CONSOLIDATED PERIOD END BALANCE SHEET    
(unaudited)    
     
  2011 2010
  First Fourth
(In thousands) Quarter Quarter
Assets    
Cash and due from banks  $ 203,600  $ 126,882
Federal funds sold 100,000 165,000
Due from banks - interest-bearing 743,569 142,807
Securities available-for-sale 5,849,390 5,720,675
Trading securities 81,287 255,397
Loans and leases:    
Commercial 4,468,177 4,514,329
Commercial real estate mortgages 1,902,862 1,958,317
Residential mortgages 3,603,058 3,552,312
Real estate construction 415,241 467,785
Equity lines of credit 733,567 733,741
Installment 146,779 160,144
Loans and leases, excluding covered loans 11,269,684 11,386,628
Allowance for loan and lease losses (263,356) (257,007)
Loans and leases, excluding covered loans, net 11,006,328 11,129,621
Covered loans, net (1) 1,684,068 1,790,133
Net loans and leases 12,690,396 12,919,754
Premises and equipment, net 131,345 128,426
Goodwill and other intangibles 527,419 528,634
Other real estate owned (2) 178,164 178,183
FDIC indemnification asset 270,576 295,466
Other assets 860,186 891,894
Total assets  $ 21,635,932  $ 21,353,118
     
Liabilities    
Deposits:    
Noninterest-bearing  $ 8,756,877  $ 8,457,178
Interest-bearing 9,721,062 9,719,684
Total deposits 18,477,939 18,176,862
Short-term borrowings 151,663 153,444
Long-term debt 703,173 704,971
Other liabilities 246,517 287,447
Total liabilities 19,579,292 19,322,724
     
Redeemable noncontrolling interest 46,013 45,676
     
Equity    
City National Corporation shareholders' equity:    
Common stock 53,886 53,886
Additional paid-in capital 480,918 487,868
Retained earnings 1,511,153 1,482,037
Accumulated other comprehensive income 26,535 36,853
Treasury shares (86,954) (101,065)
Total common shareholders' equity 1,985,538 1,959,579
Total shareholders' equity 1,985,538 1,959,579
Noncontrolling interest 25,089 25,139
Total equity 2,010,627 1,984,718
Total liabilities and equity  $ 21,635,932  $ 21,353,118
     
     
(1) Covered loans are net of $82.0 million and $67.4 million of allowance for loan losses as of March 31, 2011 and December 31, 2010, respectively.
(2) Other real estate owned includes $121.8 million and $120.9 million covered by FDIC loss share at March 31, 2011 and December 31, 2010, respectively.
     
Note: Certain prior period balances have been reclassified to conform to current period presentation.
 
CITY NATIONAL CORPORATION
CONSOLIDATED PERIOD END BALANCE SHEET
(unaudited)
         
  2010
  Fourth Third Second First
(In thousands) Quarter Quarter Quarter Quarter
Assets        
Cash and due from banks  $ 126,882  $ 224,363  $ 184,277  $ 293,855
Federal funds sold 165,000 395,010 404,760 50,000
Due from banks - interest-bearing 142,807 506,081 336,244 429,157
Securities available-for-sale 5,720,675 5,397,870 4,761,143 3,928,481
Trading securities 255,397 170,750 129,287 68,405
Loans and leases:        
Commercial 4,514,329 4,364,143 4,286,104 4,424,233
Commercial real estate mortgages 1,958,317 1,967,959 2,078,003 2,121,941
Residential mortgages 3,552,312 3,586,858 3,577,894 3,514,149
Real estate construction 467,785 575,060 629,902 730,734
Equity lines of credit 733,741 757,210 742,071 733,550
Installment 160,144 167,395 169,070 164,929
Loans and leases, excluding covered loans 11,386,628 11,418,625 11,483,044 11,689,536
Allowance for loan and lease losses (257,007) (274,167) (290,492) (292,799)
Loans and leases, excluding covered loans, net 11,129,621 11,144,458 11,192,552 11,396,737
Covered loans, net (1) 1,790,133 1,910,133 2,034,591 1,803,048
Net loans and leases 12,919,754 13,054,591 13,227,143 13,199,785
Premises and equipment, net 128,426 123,427 121,960 123,178
Goodwill and other intangibles 528,634 522,592 524,820 523,135
Other real estate owned (2) 178,183 168,853 153,292 135,551
FDIC indemnification asset 295,466 324,240 394,012 325,356
Other assets 891,894 935,839 994,509 989,572
Total assets  $ 21,353,118  $ 21,823,616  $ 21,231,447  $ 20,066,475
         
Liabilities        
Deposits:        
Noninterest-bearing  $ 8,457,178  $ 8,455,164  $ 8,173,386  $ 7,881,959
Interest-bearing 9,719,684 9,958,442 9,799,527 9,081,770
Total deposits 18,176,862 18,413,606 17,972,913 16,963,729
Short-term borrowings 153,444 156,359 3,400 9,614
Long-term debt 704,971 950,792 985,974 986,585
Other liabilities 287,447 278,729 294,578 196,471
Total liabilities 19,322,724 19,799,486 19,256,865 18,156,399
         
Redeemable noncontrolling interest 45,676 46,967 47,622 46,665
         
Equity        
City National Corporation shareholders' equity:        
Common stock 53,886 53,886 53,886 53,886
Additional paid-in capital 487,868 487,919 483,983 505,330
Retained earnings 1,482,037 1,447,569 1,418,486 1,382,421
Accumulated other comprehensive income 36,853 73,369 58,050 23,927
Treasury shares (101,065) (110,769) (112,634) (127,342)
Total common shareholders' equity 1,959,579 1,951,974 1,901,771 1,838,222
Total shareholders' equity 1,959,579 1,951,974 1,901,771 1,838,222
Noncontrolling interest 25,139 25,189 25,189 25,189
Total equity 1,984,718 1,977,163 1,926,960 1,863,411
Total liabilities and equity  $ 21,353,118  $ 21,823,616  $ 21,231,447  $ 20,066,475
         
(1) Covered loans are net of $67.4 million, $50.1 million and $46.3 million of allowance for loan losses as of December 31, 2010, September 30, 2010 and June 30, 2010, respectively.
(2) Other real estate owned includes $120.9 million, $110.4 million, $98.8 million and $77.5 million covered by FDIC loss share at December 31, 2010, September 30, 2010, June 30, 2010, and March 31, 2010, respectively.
         
Note: Certain prior period balances have been reclassified to conform to current period presentation.
 
CITY NATIONAL CORPORATION
CREDIT LOSS EXPERIENCE
(unaudited)
             
  2011 2010
  First Fourth Third Second First Year To
(Dollars in thousands) Quarter Quarter Quarter Quarter Quarter Date
             
Allowance for Loan and Lease Losses, Excluding Covered Loans            
             
Balance at beginning of period $ 257,007 $ 274,167 $ 290,492 $ 292,799 $ 288,493 $ 288,493
             
Net recoveries/(charge-offs):            
Commercial (1,352) (6,510) (17,871) (21,290) (17,625) (63,296)
Commercial real estate mortgages  6,212 (5,275) (8,954) (402) (14,967) (29,598)
Residential mortgages (615) (624) (572) (610) (1,391) (3,197)
Real estate construction  3,826 (5,496)  39 (10,944) (14,183) (30,584)
Equity lines of credit (757) (628) (793) (337) (210) (1,968)
Installment (787) (499) (83)  88 (1,160) (1,654)
Total net recoveries/(charge-offs)  6,527 (19,032) (28,234) (33,495) (49,536) (130,297)
             
Provision for credit losses  --  3,000  13,000  32,000  55,000  103,000
             
Transfers (to) from reserve for off-balance sheet credit commitments (178) (1,128) (1,091) (812) (1,158) (4,189)
             
Balance at end of period $ 263,356 $ 257,007 $ 274,167 $ 290,492 $ 292,799 $ 257,007
             
Net Recoveries/(Charge-Offs) to Average Total Loans and Leases, Excluding Covered Assets (annualized):            
             
Commercial (0.12)% (0.59)% (1.66)% (1.97)% (1.57)% (1.44)%
Commercial real estate mortgages 1.31% (1.07)% (1.75)% (0.08)% (2.82)% (1.44)%
Residential mortgage (0.07)% (0.07)% (0.06)% (0.07)% (0.16)% (0.09)%
Real estate construction 3.46% (4.05)% 0.03% (6.36)% (7.12)% (4.63)%
Equity lines of credit (0.42)% (0.34)% (0.42)% (0.18)% (0.12)% (0.26)%
Installment (2.12)% (1.18)% (0.19)% 0.21% (2.77)% (0.98)%
Total loans and leases, excluding covered loans 0.24% (0.66)% (0.98)% (1.16)% (1.68)% (1.13)%
             
Reserve for Off-Balance Sheet Credit Commitments            
             
Balance at beginning of period  $ 21,529  $ 20,401  $ 19,310  $ 18,498  $ 17,340  $ 17,340
Transfers from (to) allowance  178  1,128  1,091  812  1,158  4,189
Balance at end of period  $ 21,707  $ 21,529  $ 20,401  $ 19,310  $ 18,498  $ 21,529
             
Allowance for Losses on Covered Loans            
             
Balance at beginning of period  $ 67,389  $ 50,057  $ 46,255  $ --  $ --  $ --
Provision for losses  19,116  21,469  8,233  46,516  --  76,218
Net recoveries/(charge-offs)  --  -- (414)  --  -- (414)
Reduction in allowance due to loan removals (4,489) (4,137) (4,017) (261)  -- (8,415)
Balance at end of period  $ 82,016  $ 67,389  $ 50,057  $ 46,255  $ --  $ 67,389
             
             
           
CITY NATIONAL CORPORATION          
NONPERFORMING ASSETS          
(unaudited)          
           
  2011 2010
  First Fourth Third Second First
(Dollars in thousands) Quarter Quarter Quarter Quarter Quarter
           
Nonperforming assets, excluding covered assets          
Nonaccrual loans, excluding covered loans          
Commercial  $ 18,222  $ 20,633  $ 28,917  $ 46,530  $ 73,838
Commercial real estate mortgages  28,028  44,882  50,366  57,155  66,194
Residential mortgages  14,544  18,721  16,259  11,506  12,045
Real estate construction  81,448  98,209  135,778  138,909  164,985
Equity lines of credit  6,676  6,782  5,584  3,909  4,089
Installment  8,474  1,696  2,201  2,109  8,865
Total nonaccrual loans, excluding covered loans  157,392  190,923  239,105  260,118  330,016
           
Other real estate owned, excluding covered OREO  56,342  57,317  58,462  54,451  58,025
           
Total nonperforming assets, excluding covered assets  $ 213,734  $ 248,240  $ 297,567  $ 314,569  $ 388,041
           
Nonperforming covered assets          
Nonaccrual loans  $ 2,343  $ 2,557  $ 2,633  $ --  $ --
Other real estate owned  121,822  120,866  110,391  98,841  77,526
Total nonperforming covered assets  $ 124,165  $ 123,423  $ 113,024  $ 98,841  $ 77,526
           
Loans 90 days or more past due on accrual status, excluding covered loans  $ 3,679  $ 2,499  $ 1,020  $ 789  $ 1,712
           
Covered loans 90 days or more past due on accrual status  $ 390,267  $ 399,019  $ 416,875  $ 362,722  $ 323,620
           
Allowance for loan and lease losses as a percentage of:          
Nonaccrual loans 167.32% 134.61% 114.66% 111.68% 88.72%
Total nonperforming assets, excluding covered assets 123.22% 103.53% 92.14% 92.35% 75.46%
Total loans and leases, excluding covered loans 2.34% 2.26% 2.40% 2.53% 2.50%
           
Nonaccrual loans as a percentage of total loans, excluding covered loans 1.40% 1.68% 2.09% 2.27% 2.82%
           
Nonperforming assets, excluding covered assets, as a percentage of:          
Total loans and other real estate owned, excluding covered assets 1.89% 2.17% 2.59% 2.73% 3.30%
Total assets 0.99% 1.16% 1.36% 1.48% 1.93%
 
CITY NATIONAL CORPORATION
AVERAGE BALANCES AND RATES
(unaudited)
         
  2011 2010
  First Quarter Fourth Quarter
  Average Average Average Average
(Dollars in millions) Balance Rate Balance Rate
Assets        
Interest-earning assets         
Loans and leases         
Commercial   $ 4,437  4.30%  $ 4,392  4.39%
Commercial real estate mortgages  1,924  5.56  1,965  5.57
Residential mortgages  3,563  4.81  3,567  4.97
Real estate construction  448  4.56  538  4.29
Equity lines of credit  733  3.57  743  3.57
Installment   151  4.81  167  5.19
 Total loans and leases,        
 excluding covered loans  11,256  4.67  11,372  4.72
Covered loans  1,811  7.78  1,908  7.41
 Total loans and leases   13,067  5.11  13,280  5.10
Due from banks - interest-bearing  490  0.25  897  0.25
Federal funds sold and securities        
purchased under resale agreements  232  0.27  373  0.25
Securities available-for-sale  5,631  2.77  5,371  2.78
Trading securities  62  0.85  59  0.42
Other interest-earning assets  139  2.04  146  2.00
Total interest-earning assets  19,621  4.24  20,126  4.13
Allowance for loan and lease losses (329)   (325)  
Cash and due from banks  201    201  
Other non-earning assets  1,885    1,920  
Total assets  $ 21,378    $ 21,922  
         
Liabilities and Equity        
Interest-bearing deposits        
Interest checking accounts  $ 1,772  0.19%  $ 1,680  0.18%
Money market accounts  6,452  0.45  6,755  0.45
Savings deposits  303  0.34  290  0.34
Time deposits - under $100,000  325  0.56  355  0.49
Time deposits -- $100,000 and over  823  0.75  965  0.73
Total interest-bearing deposits  9,675  0.43  10,045  0.43
         
Other borrowings  858  4.41  900  4.54
Total interest-bearing liabilities  10,533  0.75  10,945  0.77
Noninterest-bearing deposits  8,509    8,642  
Other liabilities  338    336  
Total equity  1,998    1,999  
Total liabilities and equity  $ 21,378    $ 21,922  
         
Net interest spread    3.49%    3.36%
Net interest margin    3.84%    3.71%
         
Average prime rate    3.25%    3.25%
 
CITY NATIONAL CORPORATION
AVERAGE BALANCES AND RATES
(unaudited)
                     
  2010
  Fourth Quarter Third Quarter Second Quarter First Quarter Year to Date
   Average  Average Average Average Average Average  Average  Average Average Average
(Dollars in millions)  Balance  Rate Balance Rate Balance Rate  Balance  Rate Balance Rate
Assets                    
Interest-earning assets                     
Loans and leases                     
Commercial   $ 4,392  4.39%  $ 4,277  4.51%  $ 4,339  4.50%  $ 4,559  4.33%  $ 4,391  4.43%
Commercial real estate mortgages  1,965  5.57  2,027  5.60  2,098  5.59  2,151  5.49  2,060  5.56
Residential mortgages  3,567  4.97  3,581  5.28  3,542  5.36  3,522  5.39  3,553  5.25
Real estate construction  538  4.29  610  4.04  691  3.91  807  3.70  661  3.96
Equity lines of credit  743  3.57  750  3.60  743  3.58  735  3.56  743  3.58
Installment   167  5.19  170  5.27  169  5.16  170  5.14  169  5.19
 Total loans and leases,                    
 excluding covered loans  11,372  4.72  11,415  4.86  11,582  4.88  11,944  4.80  11,577  4.81
Covered loans  1,908  7.41  2,016  7.75  2,003  6.90  1,833  6.44  1,940  7.14
 Total loans and leases  13,280  5.10  13,431  5.28  13,585  5.18  13,777  5.03  13,517  5.15
Due from banks - interest-bearing  897  0.25  835  0.26  701  0.24  275  0.51  679  0.28
Federal funds sold and securities                    
purchased under resale agreements  373  0.25  360  0.26  213  0.25  46  0.20  249  0.25
Securities available-for-sale  5,371  2.78  4,922  3.02  4,190  3.28  3,974  3.39  4,619  3.08
Trading securities  59  0.42  58  0.23  54  0.18  62  (0.33)  58  0.12
Other interest-earning assets  146  2.00  149  2.00  148  1.80  147  1.76  148  1.89
Total interest-earning assets  20,126  4.13  19,755  4.37  18,891  4.48  18,281  4.56  19,270  4.38
Allowance for loan and lease losses (325)   (332)   (308)   (295)   (315)  
Cash and due from banks  201    212    241    299    238  
Other non-earning assets  1,920    1,980    1,975    1,982    1,964  
Total assets  $ 21,922    $ 21,615    $ 20,799    $ 20,267    $ 21,157  
                     
Liabilities and Equity                    
Interest-bearing deposits                    
Interest checking accounts  $ 1,680  0.18%  $ 1,703  0.19%  $ 2,385  0.24%  $ 2,235  0.24%  $ 1,999  0.22%
Money market accounts  6,755  0.45  6,643  0.53  5,365  0.57  4,853  0.62  5,911  0.53
Savings deposits  290  0.34  293  0.39  301  0.45  387  0.66  317  0.48
Time deposits - under $100,000  355  0.49  400  0.29  414  0.83  556  0.62  431  0.57
Time deposits -- $100,000 and over  965  0.73  1,097  0.78  1,147  0.82  1,239  0.96  1,111  0.83
Total interest-bearing deposits  10,045  0.43  10,136  0.49  9,612  0.53  9,270  0.58  9,769  0.50
                     
Federal funds purchased and securities                  
sold under repurchase agreements  -- 0.00  173  3.78  183  3.74  300  2.62  163  3.24
Other borrowings  900  4.54  869  5.60  804  5.75  812  5.73  847  5.38
Total interest-bearing liabilities  10,945  0.77  11,178  0.94  10,599  0.98  10,382  1.04  10,779  0.93
Noninterest-bearing deposits  8,642    8,161    7,988    7,594    8,100  
Other liabilities  336    316    330    288    317  
Total equity  1,999    1,960    1,882    2,003    1,961  
Total liabilities and equity  $ 21,922    $ 21,615    $ 20,799    $ 20,267    $ 21,157  
                     
Net interest spread    3.36%    3.43%    3.50%    3.52%    3.45%
Net interest margin    3.71%    3.84%    3.93%    3.97%    3.86%
                     
Average prime rate    3.25%    3.25%    3.25%    3.25%    3.25%
 
CITY NATIONAL CORPORATION
CAPITAL AND CREDIT RATING DATA
(unaudited)
             
  2011 2010
  First Fourth Third Second First Year To
  Quarter Quarter Quarter Quarter Quarter Date
Per Common Share:            
Shares Outstanding (in thousands):            
Average - Basic  52,320  52,154  52,105  52,012  51,690  51,992
Average - Diluted  52,894  52,680  52,498  52,542  52,092  52,455
Period-end  52,440  52,247  52,114  52,089  51,888  
Book value for common shareholders  $ 37.86  $ 37.51  $ 37.46  $ 36.51  $ 35.43  
Closing price:            
High  $ 62.90  $ 62.91  $ 58.00  $ 64.13  $ 54.86  $ 64.13
Low  55.65  51.57  47.91  51.23  45.81  45.81
Period-end  57.05  61.36  53.07  51.23  53.97  
             
             
Capital Ratios (Dollars in millions):            
Risk-based capital            
Risk-weighted assets (1)  $ 13,551  $ 13,712  $ 13,788  $ 13,807  $ 13,856  
Tier 1 common shareholders' equity  $ 1,449  $ 1,412  $ 1,373  $ 1,337  $ 1,309  
Percentage of risk-weighted assets (2)  10.69%  10.29%  9.96%  9.68%  9.44%  
Tier 1 capital  $ 1,479  $ 1,442  $ 1,651  $ 1,614  $ 1,586  
Percentage of risk-weighted assets  10.91%  10.52%  11.97%  11.69%  11.44%  
Total capital  $ 1,853  $ 1,821  $ 2,032  $ 2,027  $ 1,998  
Percentage of risk-weighted assets  13.68%  13.28%  14.74%  14.68%  14.42%  
Tier 1 leverage ratio  7.09%  6.74%  7.82%  7.96%  8.03%  
             
Period-end equity to period-end assets  9.29%  9.29%  9.06%  9.08%  9.29%  
Period-end common shareholders' equity            
to period-end assets  9.18%  9.18%  8.94%  8.96%  9.16%  
             
Average equity to average assets  9.35%  9.12%  9.07%  9.05%  9.88%  9.27%
Average common shareholders' equity            
to average assets  9.23%  9.01%  8.95%  8.93%  9.10%  8.99%
             
Period-end tangible equity            
to period-end tangible assets (2)  7.03%  6.99%  6.83%  6.77%  6.86%  
             
Average tangible equity            
to average tangible assets (2)  7.05%  6.89%  6.81%  6.70%  7.49%  6.96%
             
Senior Debt Credit Ratings            
For The Period Ended March 31, 2011     Standard &      
  Moody's Fitch Poor's DBRS    
City National Bank A1  A- A- A (high)    
City National Corporation A2  A- BBB+  A     
             
(1) In accordance with applicable bank regulatory guidelines, the Company calculates risk-weighted assets by assigning assets and credit equivalent amounts of derivatives and off-balance sheet items to one of several broad risk categories according to the obligor, or, if relevant, the guarantor or the nature of the collateral. The aggregate dollar amount in each risk category is then multiplied by the risk weight associated with that category. The resulting weighted values from each of the risk categories are added together for determining risk-weighted assets.
(2) The Tier 1 common shareholders' equity to risk-weighted assets ratio and tangible equity to tangible assets ratio are non-GAAP financial measures. For notes on non-GAAP measures, see pages 14 and 15 of the Selected Financial Information.
             
CITY NATIONAL CORPORATION            
COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE            
(unaudited)            
             
City National Corporation applies the two-class method of computing basic and diluted earnings per share ("EPS"). Under the two-class method, EPS is determined for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The Company grants restricted shares under a share-based compensation plan that qualify as participating securities. The computation of basic and diluted EPS is presented in the following table:
             
  2011 2010
  First Fourth Third Second First Year to
(Dollars in thousands, except per share amounts) Quarter Quarter Quarter Quarter Quarter Date
Basic EPS:            
Net income attributable to City National Corporation  $ 39,692  $ 39,743  $ 34,418  $ 41,318  $ 15,698  $ 131,177
Less: Dividends and accretion on preferred stock  --  --  --  --  5,702  5,702
Net income available to common shareholders  $ 39,692  $ 39,743  $ 34,418  $ 41,318  $ 9,996  $ 125,475
Less: Earnings allocated to participating securities  578  532  447  535  113  1,605
Earnings allocated to common shareholders  $ 39,114  $ 39,211  $ 33,971  $ 40,783  $ 9,883  $ 123,870
             
Weighted average common shares outstanding  52,320  52,154  52,105  52,012  51,690  51,992
             
Basic earnings per common share  $ 0.75  $ 0.75  $ 0.65  $ 0.78  $ 0.19  $ 2.38
             
Diluted EPS:            
Earnings allocated to common shareholders (1)  $ 39,119  $ 39,216  $ 33,974  $ 40,787  $ 9,883  $ 123,882
             
Weighted average common shares outstanding  52,320  52,154  52,105  52,012  51,690  51,992
Dilutive effect of equity awards  574  526  393  530  402  463
Weighted average diluted common shares outstanding  52,894  52,680  52,498  52,542  52,092  52,455
             
Diluted earnings per common share  $ 0.74  $ 0.74  $ 0.65  $ 0.78  $ 0.19  $ 2.36
             
(1) Earnings allocated to common shareholders for basic and diluted EPS may differ under the two-class method as a result of adding common stock equivalents for options and warrants to dilutive shares outstanding, which alters the ratio used to allocate earnings to common shareholders and participating securities for the purposes of calculating diluted EPS.
 
CITY NATIONAL CORPORATION
NON-GAAP FINANCIAL MEASURES
(unaudited)
             
(a) Tangible equity ratios
             
Tangible equity to tangible assets is a non-GAAP financial measure that represents total equity less identifiable intangible assets and goodwill divided by total assets less identifiable intangible assets and goodwill. Management reviews this measure in evaluating the Company's capital levels and has included the ratio in response to market participant interest in tangible equity as a measure of capital. A reconciliation of the GAAP to non-GAAP measure is set forth below: 
             
  2011 2010
  First Fourth Third Second First Year to
(Dollars in thousands) Quarter Quarter Quarter Quarter Quarter Date
Period End:            
Total equity  $ 2,010,627  $ 1,984,718  $ 1,977,163  $ 1,926,960  $ 1,863,411  
Less: Goodwill and other intangibles  (527,419)  (528,634)  (522,592)  (524,820)  (523,135)  
Tangible equity (A)  1,483,208  1,456,084  1,454,571  1,402,140  1,340,276  
             
Total assets  $ 21,635,932  $ 21,353,118  $ 21,823,616  $ 21,231,447  $ 20,066,475  
Less: Goodwill and other intangibles  (527,419)  (528,634)  (522,592)  (524,820)  (523,135)  
Tangible assets (B)  $ 21,108,513  $ 20,824,484  $ 21,301,024  $ 20,706,627  $ 19,543,340  
             
Period-end tangible equity            
to period-end tangible assets (A)/(B)  7.03% 6.99% 6.83% 6.77% 6.86%  
             
Average Balance:            
Total equity  $ 1,998,006  $ 1,999,494  $ 1,960,206  $ 1,881,635  $ 2,003,150  $ 1,961,109
Less: Goodwill and other intangibles  (528,205)  (525,747)  (523,855)  (522,311)  (524,838)  (524,189)
Tangible equity (C)  1,469,801  1,473,747  1,436,351  1,359,324  1,478,312  1,436,920
             
Total assets  $ 21,377,904  $ 21,922,240  $ 21,614,748  $ 20,799,187  $ 20,267,248  $ 21,156,661
Less: Goodwill and other intangibles  (528,205)  (525,747)  (523,855)  (522,311)  (524,838)  (524,189)
Tangible assets (D)  $ 20,849,699  $ 21,396,493  $ 21,090,893  $ 20,276,876  $ 19,742,410  $ 20,632,472
             
Average tangible equity            
to average tangible assets (C)/(D) 7.05% 6.89% 6.81% 6.70% 7.49% 6.96%
 
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. 
           
   2011 2010
  First Fourth Third Second First
(Dollars in thousands) Quarter Quarter Quarter Quarter Quarter
Tier 1 capital  $ 1,478,820  $ 1,441,837  $ 1,650,793  $ 1,614,341  $ 1,585,727
Less: Noncontrolling interest  (25,089)  (25,139)  (25,189)  (25,088)  (25,088)
Less: Trust preferred securities  (5,155)  (5,155)  (252,115)  (252,088)  (252,062)
Tier 1 common shareholders' equity (A)  $ 1,448,576  $ 1,411,543  $ 1,373,489  $ 1,337,165  $ 1,308,577
           
Risk-weighted assets (B)  $ 13,551,318  $ 13,712,097  $ 13,788,060  $ 13,806,764  $ 13,856,028
           
Tier 1 common shareholders' equity to risk-based assets (A)/(B)  10.69%  10.29%  9.96%  9.68%  9.44%
CONTACT:  Financial/Investors	
          Christopher J. Carey, City National
          310.888.6777
          Chris.Carey@cnb.com	

          Media
          Cary Walker, City National
          213.673.7615
          Cary.Walker@cnb.com

          Conference Call:
          Today 2:00 p.m. PDT
          (866) 393-6804
          Conference ID: 53596171

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