News Release

Printer Friendly Version View printer-friendly version
<< Back
City National Corp. Reports Third-Quarter 2011 Net Income of $41.4 Million,
Up 20 Percent from the Third Quarter of 2010

Commercial loans increase 15 percent year over year

Core deposits rise 10 percent

Total assets exceed $23 billion for the first time

 

LOS ANGELES, Oct. 20, 2011 (GLOBE NEWSWIRE) -- City National Corporation (NYSE:CYN), the parent company of wholly owned City National Bank, today reported third-quarter 2011 net income of $41.4 million, or $0.77 per share, up 20 percent from $34.4 million, or $0.65 per share in the third quarter of 2010.

Year to date, City National's net income totaled $128.6 million, up 41 percent from $91.4 million in the first nine months of 2010. Earnings per share were $2.39, up 48 percent from $1.62 per share in the first nine months of last year.

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 quarterly dividend is payable on November 16, 2011 to stockholders of record on November 2, 2011.

THIRD-QUARTER 2011 AND YEAR-TO-DATE HIGHLIGHTS

  • Fully taxable-equivalent net interest income amounted to $203.6 million, up 4 percent from the second quarter of 2011 and 7 percent from the same period last year. Fully taxable-equivalent net interest income for the first nine months of 2011 amounted to $584.3 million, up 5 percent from the same period last year.
  • Average deposit balances grew to a record $19.7 billion in the third quarter of 2011, up 5 percent from $18.8 billion in the second quarter of this year and 8 percent from $18.3 billion in the third quarter of 2010. Average core deposits grew 5 percent from the second quarter of 2011 and 10 percent from the third quarter of last year. They account for 96 percent of average deposit balances. Average deposits for the first nine months amounted to $18.9 billion, up 7 percent from the same period of 2010.
  • Average third-quarter loan balances were $11.8 billion, up 2 percent from the second quarter of 2011 and 3 percent from the third quarter of 2010, excluding loans covered by City National's acquisition-related loss‑sharing agreements with the Federal Deposit Insurance Corporation (FDIC). Average commercial loan balances grew 5 percent from the second quarter of this year and 15 percent from the year-ago period.
  • Following two quarters with no provision, the company recorded a $7.5 million provision for loan and lease losses, excluding loans covered by FDIC loss-sharing agreements, in the third quarter of 2011. City National recorded a $13.0 million provision in the third quarter of 2010, which brought its total for the first nine months of last year to $100.0 million. The company remains adequately reserved at 2.16 percent of total loans, excluding FDIC-covered loans.

"In this challenging economic environment, City National completed another positive quarter as it again grew income, loans and deposits meaningfully, and for the first time assets exceeded $23 billion," said Chief Executive Officer Russell Goldsmith.  "Even with our first credit provision in 2011, which was due in part to good commercial loan growth, the company's overall credit quality continues to improve.

"City National also is not burdened or distracted by mortgage-related issues and other headline-grabbing challenges that confront some other banks. Instead, we continue to grow our client base and invest in the future by expanding our products and services, enhancing our productivity and capabilities, and selectively adding talented new colleagues to the City National team."

Dollars in millions, For the three months ended
September 30,
% For the three
months ended
%
except per share data 2011 2010 Change June 30, 2011 Change
Earnings Per Share  $ 0.77  $ 0.65 18  $ 0.88 (13)
Net Income Attributable to CNC  41.4  34.4 20  47.5 (13)
           
Average Assets  $ 22,998.6  $ 21,614.7 6  $ 22,009.7 4
Return on Average Assets  0.71 %  0.63 % 13  0.87 %  (18)
Return on Average Equity  7.85 %  7.06 % 11  9.39 %  (16)

ASSETS

Total assets at September 30, 2011 grew to a record $23.1 billion, up 3 percent from the second quarter of this year and 6 percent from the third quarter of 2010.

REVENUE

Revenue for the third quarter of 2011 was $269.0 million, down 5 percent from the second quarter of this year but up 6 percent from the third quarter of 2010. Revenue for the first nine months of 2011 totaled $826.9 million, up 2 percent from $811.5 million during the same period of 2010.

NET INTEREST INCOME

Fully taxable-equivalent net interest income was $203.6 million in the third quarter of 2011, up 4 percent from the second quarter of this year and 7 percent from the same period last year. Fully taxable-equivalent net interest income for the first nine months of 2011 was $584.3 million, up 5 percent from $555.2 million in the year-ago period.

Third-quarter average deposits reached a record $19.7 billion, up 5 percent from the second quarter of this year and 8 percent from the third quarter of 2010. Average deposits for the first nine months of 2011 totaled $18.9 billion, up 7 percent from the first nine months of 2010. Period-end deposits grew to $19.9 billion, up 3 percent from June 30 of this year and 8 percent from September 30, 2010.

Average core deposits were $18.9 billion in the third quarter of 2011, up 5 percent from the second quarter of 2011 and 10 percent from the same period of 2010.  Year-to-date average core deposits grew 10 percent from the same period of 2010. Core deposits represent 96 percent of the company's average balances.

Third-quarter 2011 average noninterest-bearing deposits were up 9 percent from the second quarter of 2011 and 19 percent from the same period of 2010. Average noninterest-bearing balances in the first nine months of 2011 were up 14 percent from the same period last year.

Treasury Services deposit balances, which consist primarily of title, escrow and property management deposits, averaged $1.8 billion in the third quarter of this year, up 6 percent from the second quarter of 2011 and 16 percent from the same period of 2010. Year to date, Treasury Services deposit balances averaged $1.6 billion, up 23 percent from the first nine months of 2010. The increases reflect the addition of new title and escrow clients, as well as an increase in commercial real estate activity and residential refinance activity during the quarter.

Third-quarter average loan balances, excluding FDIC-covered loans, were $11.8 billion, up 2 percent from the second quarter of this year and 3 percent from the third quarter of 2010. For the first nine months of 2011, City National's average loans, excluding FDIC-covered loans, were $11.5 billion, down 1 percent from the year-ago period.

Third-quarter average commercial loans were up 5 percent from the second quarter of 2011 and 15 percent from the same period last year.

Average balances for commercial real estate mortgages were up 2 percent from the second quarter of 2011 but down 4 percent from the third quarter of last year. Average balances for commercial real estate construction loans were down 12 percent from the second quarter of 2011 and 43 percent from the third quarter of last year.

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 second quarter of this year and 4 percent from the year-ago period.

Average securities for the third quarter of 2011 totaled $7.0 billion, up 12 percent from the second quarter of this year and 40 percent from the third quarter of 2010, as deposit growth continued to outpace loan growth. The average duration of total available-for-sale securities at September 30, 2011 was 2.1 years, down from 2.3 years at the end of the second quarter of this year but unchanged from September 30, 2010.

City National's net interest margin in the third quarter of 2011 averaged 3.79 percent, compared with 3.85 percent in the second quarter of 2011 and 3.84 percent in the third quarter of 2010. For the first nine months of 2011, City National's net interest margin averaged 3.82 percent, compared with 3.91 percent in the previous year. The declines were due primarily to strong deposit growth and lower loan yields. The company continued to invest a large share of its growing deposits in securities available-for-sale and other liquid assets.

Third-quarter net interest income included $18.3 million from the FDIC-covered loans that were repaid or charged off during the quarter. This compares with $11.1 million in the second quarter of this year and $9.2 million in the third quarter of 2010.

At September 30, 2011, City National's prime lending rate was 3.25 percent, unchanged from both June 30, 2011 and September 30, 2010.

  For the three months ended
September 30,
% For the three
months ended
%
Dollars in millions 2011 2010 Change June 30, 2011 Change
Average Loans and Leases, excluding Covered Loans  $ 11,796.6  $ 11,414.9 3  $ 11,516.0 2
Average Covered Loans  1,664.3  2,015.7 (17)  1,770.4 (6)
Average Total Securities   6,954.1  4,980.2 40  6,224.3 12
Average Earning Assets  21,316.6  19,755.4 8  20,314.4 5
Average Deposits  19,724.6  18,297.2 8  18,784.4 5
Average Core Deposits  18,923.6  17,200.7 10  17,951.4 5
Fully Taxable-Equivalent Net Interest Income  203.6  191.1 7  195.1 4
Net Interest Margin  3.79 %  3.84 %  (1)  3.85 %  (2)

COVERED ASSETS

Loans and other real estate owned (OREO) assets acquired in City National's FDIC‑assisted acquisitions totaled $1.7 billion at the end of the third quarter of 2011, down from $1.8 billion at June 30, 2011 and $2.0 billion at September 30, 2010.

In the third quarter of 2011, the company recorded a $5.9 million non-cash net impairment charge to reflect results of the quarterly update of cash-flow projections for the FDIC-covered loans. The loss reflected a provision for loan losses of $5.1 million for covered loans and a corresponding $0.8 million of other expense related to City National's loss-sharing agreements with the FDIC.  City National will continue to update cash-flow projections for covered loans on a quarterly basis. Due to the uncertainty in the future performance of the covered loans, additional impairments may be recognized in the future.

OREO assets acquired by City National in four FDIC-assisted acquisitions and subject to loss-sharing agreements totaled $102.8 million at September 30, 2011, compared to $114.9 million at the end of the second quarter of this year and $110.4 million in the third quarter of 2010.

NONINTEREST INCOME

Noninterest income was $69.6 million in the third quarter of 2011, down 24 percent from the second quarter of 2011 but up 4 percent from the year-ago quarter. Third-quarter 2011 results included a net FDIC loss-sharing expense of $14.2 million, up from $10.7 million in the second quarter of 2011 and $0.4 million in the third quarter of last year.

Noninterest income for the second quarter of 2011 and third quarter of 2010 also included net gains of $8.2 million and $2.1 million, respectively, for FDIC-assisted acquisitions. Excluding these items, third-quarter noninterest income was down 17 percent from the second quarter of 2011 and up 8 percent from the same period last year.1

City National's noninterest income totaled $255.5 million in the first nine months of 2011, down 4 percent from the same period of 2010.

In the third quarter of 2011, noninterest income accounted for 26 percent of City National's total revenue, compared to 33 percent in the second quarter of this year and 26 percent in the third quarter of 2010.

Wealth Management

City National's assets under management totaled $33.6 billion as of September 30, 2011, down 8 percent from the second quarter of this year and 6 percent from the same period of 2010.

Trust and investment fees were $35.4 million, down 4 percent from the second quarter of 2011 but up 8 percent from the third quarter of 2010. Year-to-date trust and investment fee income rose 8 percent from the same period last year.

Money market mutual fund and brokerage fees totaled $5.1 million, up 4 percent from the second quarter of this year but down 22 percent from the year-ago period. Money market mutual fund and brokerage fee income was $15.6 million in the first nine months of this year, down 9 percent from the same period of 2010. The declines in money market mutual fund and brokerage fees were due primarily to the impact of extraordinarily low short-term interest rates.

  At or for the 
three months ended
September 30,
% At or for the
three months
ended
%
Dollars in millions 2011 2010  Change June 30, 2011 Change
           
Trust and Investment Fee Revenue  $ 35.4  $ 32.7 8  $ 36.7 (4)
Brokerage and Mutual Fund Fees  5.1  6.5 (22)  4.9 4
Assets Under Management (1)  33,590.5  35,690.0 (6)  36,407.3 (8)
Assets Under Management or Administration (1)  55,647.1  56,890.6 (2)  58,502.0 (5)
           
(1) Excludes $16.1 billion, $19.5 billion, and $19.0 billion of assets under management for asset managers in which City National held a noncontrolling ownership interest as of September 30, 2011, June 30, 2011 and September 30, 2010, respectively.

Other Noninterest Income

Third-quarter income from cash management and deposit transaction fees was $11.0 million, up 1 percent from the second quarter of 2011 and down 5 percent from the third quarter of 2010. Year-to-date 2011 cash management and deposit transaction fees were $33.6 million, down 7 percent from the same period last year. The declines were due to higher deposit balances used to offset service charge fees.

Fee income from foreign exchange services and letters of credit totaled $10.4 million in the third quarter of 2011, up 15 percent from the second quarter of 2011 and 31 percent from the third quarter of last year, due primarily to higher foreign exchange volume. Year-to-date 2011 foreign exchange services and letters of credit fee income totaled $27.7 million, up 21 percent from the first nine months of 2010.

Other income was $13.5 million in the third quarter of 2011, down 42 percent from the second quarter of this year but up 291 percent from the year-ago period. Other income in the first nine months of this year was $58.2 million, up 152 percent from the same period last year. Results for the first nine months of 2011 reflected higher gains on the transfer of covered loans to OREO. In addition, third-quarter 2010 results included a $12.3 million charge for the early retirement of debt.

NONINTEREST EXPENSE

City National's third-quarter 2011 noninterest expense amounted to $197.6 million, down 7 percent from the second quarter of this year but up 7 percent from the third quarter of 2010.

Expense growth from the third quarter of last year was due largely to higher compensation, reflecting the addition of more than 90 new colleagues. The growth also stems from higher expenses for OREO, legal and professional services, and marketing and advertising. Approximately 83 percent of OREO expenses are related to covered assets, and a significant portion of these expenses is reimbursed by the FDIC and reflected in noninterest income.

Noninterest expense for the first nine months of 2011 amounted to $606.9 million, up 11 percent from the same period last year.

CREDIT QUALITY

The following credit quality information excludes loans subject to loss-sharing agreements involving City National's FDIC-assisted transactions:

Net charge-offs in the third quarter of 2011 totaled $10.6 million, or 0.36 percent of total loans and leases on an annualized basis. The company realized net recoveries of $4.2 million, or 0.15 percent, in the second quarter of this year and net charge-offs of $28.2 million, or 0.98 percent, in the third quarter of 2010.

At September 30, 2011, nonperforming assets amounted to $190.7 million, or 1.56 percent of the company's total loans and leases and OREO, compared to $180.4 million, or 1.54 percent, at June 30, 2011, and $297.6 million, or 2.59 percent, at September 30, 2010.

Nonaccrual loans at September 30, 2011 were $146.1 million, compared to $132.8 million at June 30, 2011 and $239.1 million at September 30, 2010. The increases in charge-offs and nonaccruals were principally due to one commercial loan and a construction credit. Delinquencies and classified loans declined from the second quarter, and overall credit trends remain favorable.

  As of
September 30, 2011
As of
June 30, 2011
As of
September 30, 2010
Period-end Loans (in millions) Total Nonaccrual Total Nonaccrual Total Nonaccrual
             
Commercial $ 5,166.8 $ 34.9 $ 4,800.2 $ 24.3 $ 4,364.1 $ 30.1
Commercial Real Estate Mortgages  2,059.1  20.8  1,930.3  26.7  1,967.9  50.4
Residential Mortgages  3,742.8  10.5  3,710.8  14.2  3,586.9  16.2
Real Estate Construction  335.7  70.8  355.0  60.5  575.1  135.8
Equity Lines of Credit  728.9  8.4  735.9  6.7  757.2  5.6
Other Loans  130.9  0.7  130.9  0.4  167.4  1.0
Total Loans (1) $ 12,164.2 $ 146.1 $ 11,663.1 $ 132.8 $ 11,418.6 $ 239.1
             
Other Real Estate Owned (1)    44.5    47.6    58.5
Total Nonperforming Assets, excluding          
Covered Assets   $ 190.6   $ 180.4   $ 297.5
             
(1) Excludes covered loans, net of allowance, of $1.6 billion, $1.7 billion and $1.9 billion at September 30, 2011, June 30, 2011 and September 30, 2010, respectively, and covered other real estate owned of $102.8 million, $114.9 million and $110.4 million at September 30, 2011, June 30, 2011 and September 30, 2010, respectively.

City National recorded a provision for credit losses of $7.5 million in the third quarter of 2011, following two quarters with no provision. The company recorded a $13.0 million provision in the third quarter of 2010, bringing its total for the first nine months of last year to $100.0 million.

At September 30, 2011, City National's allowance for loan and lease losses totaled $263.3 million, or 2.16 percent of total loans and leases. That compares with $265.9 million, or 2.28 percent, at the end of the second quarter of 2011 and $274.2 million, or 2.40 percent, at September 30, 2010. The company also maintains an additional $22.8 million in reserves for off-balance-sheet credit commitments.

Commercial Loans

Commercial loan net charge-offs were $2.9 million in the third quarter of 2011. This compares to net recoveries of $2.6 million in the second quarter of this year, and net charge-offs of $17.9 million in the year-earlier period. Net charge-offs in the first nine months of 2011 amounted to $2.2 million, compared to net charge-offs of $56.8 million in the first nine months of last year.

Commercial loans on nonaccrual totaled $34.9 million in the third quarter of 2011, compared to $24.3 million at June 30, 2011, and $30.1 million at September 30, 2010.

Construction Loans

City National's $335.7 million commercial real estate construction portfolio includes secured loans to developers of residential and nonresidential properties. This portfolio has been reduced 42 percent since September 30, 2010, and construction loans now account for 3 percent of the company's total loans.

Third quarter net charge-offs of construction loans were $6.2 million, compared to net recoveries of $577,000 in the second quarter of 2011 and $39,000 in the third quarter of 2010. Net charge-offs amounted to $1.8 million in the first nine months of 2011, down from $25.1 million in the same period of last year.

At September 30, 2011, construction loans on nonaccrual totaled $70.8 million, compared to $60.5 million at June 30, 2011, and $135.8 million at September 30, 2010.

Commercial Real Estate Mortgage Loans

Third-quarter net charge-offs in the company's $2.1 billion commercial real estate mortgage portfolio were $452,000, compared to net recoveries of $1.3 million in the second quarter of 2011, and net charge-offs of $9.0 million in the third quarter of 2010. Net recoveries amounted to $7.0 million in the first nine months of 2011, compared with net charge-offs of $24.3 million in the first nine months of last year.

Commercial real estate mortgage loans on nonaccrual totaled $20.7 million, down from $26.7 million at June 30, 2011, and $50.4 million at September 30, 2010.

Residential Mortgage Loans and Equity Lines of Credit

City National's $3.7 billion residential mortgage portfolio and $728.9 million home-equity portfolio continued to perform exceptionally well.  Together, they accounted for $0.7 million in net charge-offs, compared to $0.4 million at June 30, 2011, and $1.4 million at September 30, 2010.  Net charge-offs amounted to $2.4 million in the first nine months of 2011, compared to $3.9 million in the same period of last year.

Residential mortgage loans and lines of credit on nonaccrual were $18.9 million in the third quarter of 2011, compared to $20.9 million in the second quarter of this year and $21.8 million in the third quarter of 2010.

INCOME TAXES

City National's effective tax rate for the third quarter of 2011 was 27.7 percent, unchanged from the year-ago period. For the first nine months of 2011, City National's effective tax rate was 29.4 percent, compared to 13.7 percent in the prior year period.  The increase largely reflects a tax litigation settlement and revisions to certain deferred tax accounts in 2010, as well as higher pretax income in the first nine months of this year.

CAPITAL LEVELS

City National remains well-capitalized, ending the third quarter of 2011 with a Tier 1 common shareholders' equity ratio of 10.3 percent, compared to 10.5 percent at June 30, 2011 and 10.0 percent at September 30, 2010.1

Total risk-based capital and Tier 1 risk-based capital ratios at September 30, 2011 were 12.9 percent and 10.3 percent, respectively. City National's Tier 1 leverage ratio at September 30, 2011 was 6.8 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 Tier 1 leverage ratios at June 30, 2011 were 13.3 percent, 10.7 percent and 7.1 percent, respectively.

The period-end ratio of equity to total assets at September 30, 2011 was 9.2 percent, compared to 9.3 percent at June 30, 2011 and 9.1 percent at September 30, 2010.

2011 OUTLOOK

Management continues to expect significantly increased profitability for 2011 as compared with 2010.

CONFERENCE CALL

City National Corporation will host a conference call this afternoon to discuss third-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 10733405.  A listen-only live broadcast of the call also will be available on the investor relations page of the company's Website at cnb.com.  There, it will be archived and available for 12 months.

ABOUT CITY NATIONAL

City National Corporation's wholly owned subsidiary, City National Bank, provides banking, investment and trust services through 78 offices, including 16 full-service regional centers, in Southern California, the San Francisco Bay Area, Nevada, New York City and Nashville, Tenn. The corporation and its investment affiliates manage or administer $55.6 billion in client investment assets, including nearly $33.6 billion under direct management.

For more information about City National, visit the company's Website at 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 and the impact they have on the company and its customers, (2) the impact on financial markets and the economy of the downgrade by Standard & Poor's of U.S. Treasury obligations and other U.S. government-backed debt, as well as issues surrounding the level of U.S. and European debt, (3) changes in the pace of economic recovery and related changes in employment levels, (4) 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, (5) significant changes in applicable laws and regulations, including those concerning taxes, banking and securities, (6) volatility in the municipal bond market, (7) changes in the level of nonperforming assets, charge-offs, other real estate owned and provision expense, (8) 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, (9) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board, (10) changes in inflation, interest rates, and market liquidity which may impact interest margins and impact funding sources, (11) adequacy of the company's enterprise risk management framework, (12) the company's ability to increase market share and control expenses, (13) the company's ability to attract new employees and retain and motivate existing employees, (14) increased competition in the company's markets, (15) 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, (16) 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, (17) changes in consumer spending, borrowing and savings habits, (18) soundness of other financial institutions which could adversely affect the company, (19) protracted labor disputes in the company's markets, (20) earthquake, fire or other natural disasters affecting the condition of real estate collateral, (21) the effect of acquisitions and integration of acquired businesses and de novo branching efforts, (22) the impact of changes in regulatory, judicial or legislative tax treatment of business transactions, (23) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies, and (24) 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 15 and 16 of the Selected Financial Information.

CITY NATIONAL CORPORATION            
FINANCIAL HIGHLIGHTS            
(unaudited)            
  Three Months Nine Months
For The Period Ended September 30, 2011 2010 % Change 2011 2010 % Change
Per Common Share            
Net income available to common shareholders            
Basic  $ 0.78  $ 0.65  20  $ 2.41  $ 1.63  48
Diluted  0.77  0.65  18  2.39  1.62  48
Dividends  0.20  0.10  100  0.60  0.30  100
Book value  40.40  37.46  8
             
Results of Operations: (In millions)            
Interest income  $ 217  $ 214  1  $ 628  $ 624  1
Interest expense 18 26  (33) 57 79  (28)
Net interest income 199 188  6 571 545  5
Net interest income (Fully taxable-equivalent) 204 191  7 584 555  5
Total revenue 269 255  6 827 812  2
Provision for credit losses on loans and leases, excluding covered loans 8 13  (42) 8 100  (93)
Provision for losses on covered loans 5 8  (37) 26 55  (53)
Net income attributable to City National Corporation 41 34  20 129 91  41
Net income available to common shareholders 41 34  20 129 86  50
             
Financial Ratios:            
Performance Ratios:            
Return on average assets  0.71 %  0.63 %    0.78 %  0.58 %  
Return on average common shareholders' equity  7.85  7.06    8.46  6.10  
Period-end equity to period-end assets      9.18  9.06  
Net interest margin  3.79  3.84    3.82  3.91  
Expense to revenue ratio  67.68  66.91    66.50  61.09  
Capital Adequacy Ratios (Period-end):            
Tier 1 leverage    6.82  7.82  
Tier 1 risk-based capital    10.32  11.97  
Total risk-based capital    12.93  14.74  
             
Asset Quality Ratios:            
Allowance for loan and lease losses to:            
Total loans and leases, excluding covered loans  2.16 %  2.40 %  
Nonaccrual loans  180.21  114.66  
Nonperforming assets, excluding covered assets, to:            
Total loans and leases and other real estate owned, excluding
covered assets
 1.56  2.59  
Total assets    0.83  1.36  
Net (charge-offs) recoveries to average total loans and leases, excluding covered loans (annualized)  (0.36) %  (0.98) %    0.00 %  (1.28) %  
             
Average Balances: (In millions)            
Loans and leases, excluding covered loans  $ 11,797  $ 11,415  3  $ 11,525  $ 11,645  (1)
Covered loans 1,664 2,016  (17) 1,748 1,951  (10)
Securities 6,954 4,980  40 6,295 4,424  42
Interest-earning assets 21,317 19,755  8 20,424 18,981  8
Assets 22,999 21,615  6 22,135 20,899  6
Core deposits 18,924 17,201  10 18,084 16,432  10
Deposits 19,725 18,297  8 18,903 17,592  7
Interest-bearing liabilities 10,841 11,178  (3) 10,701 10,723  --
Common shareholders' equity 2,093 1,935  8 2,032 1,879  8
Total equity 2,117 1,960  8 2,057 1,948  6
             
Period-End Balances: (In millions)            
Loans and leases, excluding covered loans    $ 12,164  $ 11,419  7
Covered loans       1,612 1,960  (18)
Securities     7,279 5,569  31
Assets 23,104 21,824  6
Core deposits 19,137 17,343  10
Deposits 19,909 18,414  8
Common shareholders' equity 2,120 1,952  9
Total equity   2,120 1,977  7
             
Wealth Management: (In millions) (1)            
Assets under management    $ 33,591  $ 35,690  (6)
Assets under management or administration   55,647 56,891  (2)
             
(1) Excludes $16.1 billion and $19.0 billion of assets under management for asset managers in which City National held a noncontrolling ownership interest as of September 30, 2011 and September 30, 2010, respectively.
             
Note: Certain prior period balances have been reclassified to conform to current period presentation.            
             
CITY NATIONAL CORPORATION            
CONSOLIDATED STATEMENTS OF INCOME            
(unaudited)            
(Dollars in thousands Three Months Ended
September 30,
Nine Months Ended
September 30,
except per share data) 2011 2010 % Change 2011 2010 % Change
Interest income  $ 216,892  $ 214,061  1  $ 627,838  $ 623,930  1
Interest expense  17,576  26,345  (33)  56,405  78,711  (28)
Net Interest Income  199,316  187,716  6  571,433  545,219  5
             
Provision for credit losses on loans and leases, excluding covered loans  7,500  13,000  (42)  7,500  100,000  (93)
Provision for losses on covered loans  5,147  8,233  (37)  25,979  54,749  (53)
             
Noninterest Income            
Trust and investment fees  35,412  32,695  8  107,737  100,180  8
Brokerage and mutual fund fees  5,079  6,494  (22)  15,604  17,236  (9)
Cash management and deposit transaction fees  10,986  11,620  (5)  33,616  36,204  (7)
International services  10,352  7,905  31  27,683  22,787  21
FDIC loss sharing (expense) income, net  (14,191)  (377)  3,664  (16,270)  37,048  (144)
Gain on securities  3,327  299  1,013  4,688  1,279  267
Gain on disposal of assets  5,191  2,603  99  16,037  1,180  1,259
Gain on acquisition  --  2,111  (100)  8,164  27,339  (70)
Other  13,479  3,448  291  58,206  23,054  152
Total noninterest income  69,635  66,798  4  255,465  266,307  (4)
             
Noninterest Expense            
Salaries and employee benefits  112,729  103,397  9  335,880  297,966  13
Net occupancy of premises  13,713  14,463  (5)  40,724  40,715  0
Legal and professional fees  14,242  10,633  34  39,109  33,570  16
Information services  7,906  7,940  (0)  23,738  22,994  3
Depreciation and amortization  6,930  6,351  9  20,582  19,061  8
Amortization of intangibles  2,105  2,228  (6)  6,377  6,803  (6)
Marketing and advertising  6,675  4,954  35  20,819  16,000  30
Office services and equipment  4,456  4,035  10  13,734  12,105  13
Other real estate owned  13,160  12,642  4  49,811  46,731  7
FDIC assessments  6,670  7,561  (12)  25,000  21,744  15
Other  9,051  10,477  (14)  31,092  29,613  5
Total noninterest expense  197,637  184,681  7  606,866  547,302  11
             
Income Before Taxes  58,667  48,600  21  186,553  109,475  70
             
Applicable Income Taxes  16,267  13,461  21  54,803  15,020  265
             
Net Income  $ 42,400  $ 35,139  21  $ 131,750  $ 94,455  39
             
Less: Net income attributable to noncontrolling interest  1,002  721  39  3,189  3,021  6
             
Net income attributable to City National Corporation  $ 41,398  $ 34,418  20  $ 128,561  $ 91,434  41
             
Less: Dividends and accretion on preferred stock  --  --  --  --  5,702  (100)
             
Net income available to common shareholders  $ 41,398  $ 34,418  20  $ 128,561  $ 85,732  50
             
Other Data:            
Earnings per common share - basic  $ 0.78  $ 0.65  20  $ 2.41  $ 1.63  48
Earnings per common share - diluted  $ 0.77  $ 0.65  18  $ 2.39  $ 1.62  48
Dividends paid per common share  $ 0.20  $ 0.10  100  $ 0.60  $ 0.30  100
Common dividend payout ratio  25.70 %  15.31 %  68  24.77 %  18.36 %  35
Return on average assets  0.71 %  0.63 %  13  0.78 %  0.58 %  34
Return on average common shareholders' equity  7.85 %  7.06 %  11  8.46 %  6.10 %  39
Net interest margin (Fully taxable-equivalent)  3.79 %  3.84 %  (1)  3.82 %  3.91 %  (2)
Full-time equivalent employees  3,287  3,195  3      
             
Note: Certain prior period balances have been reclassified to conform to current period presentation.            
         
CITY NATIONAL CORPORATION        
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME        
(unaudited)        
  2011
(Dollars in thousands Third Second First Year to
except per share data) Quarter Quarter Quarter Date
Interest income $ 216,892  $ 210,136  $ 200,810  $ 627,838
Interest expense  17,576  19,309  19,520  56,405
Net Interest Income  199,316  190,827  181,290  571,433
         
Provision for credit losses on loans and leases, excluding covered loans  7,500  --  --  7,500
Provision for losses on covered loans  5,147  1,716  19,116  25,979
         
Noninterest Income        
Trust and investment fees  35,412  36,687  35,638  107,737
Brokerage and mutual fund fees  5,079  4,864  5,661  15,604
Cash management and deposit transaction fees  10,986  10,905  11,725  33,616
International services  10,352  9,015  8,316  27,683
FDIC loss sharing (expense) income, net  (14,191)  (10,684)  8,605  (16,270)
Gain (loss) on securities  3,327  1,395  (34)  4,688
Gain on disposal of assets  5,191  8,422  2,424  16,037
Gain on acquisition  --  8,164  --  8,164
Other  13,479  23,169  21,558  58,206
Total noninterest income  69,635  91,937  93,893  255,465
         
Noninterest Expense        
Salaries and employee benefits  112,729  112,139  111,012  335,880
Net occupancy of premises  13,713  13,665  13,346  40,724
Legal and professional fees  14,242  14,790  10,077  39,109
Information services  7,906  8,335  7,497  23,738
Depreciation and amortization  6,930  6,904  6,748  20,582
Amortization of intangibles  2,105  2,104  2,168  6,377
Marketing and advertising  6,675  7,626  6,518  20,819
Office services and equipment  4,456  4,672  4,606  13,734
Other real estate owned  13,160  22,162  14,489  49,811
FDIC assessments  6,670  8,524  9,806  25,000
Other  9,051  10,911  11,130  31,092
Total noninterest expense  197,637  211,832  197,397  606,866
         
Income Before Taxes  58,667  69,216  58,670  186,553
         
Applicable Income Taxes  16,267  20,650  17,886  54,803
         
Net Income  $ 42,400  $ 48,566  $ 40,784  $ 131,750
         
Less: Net income attributable to noncontrolling interest  1,002  1,095  1,092  3,189
         
Net income attributable to City National Corporation  $ 41,398  $ 47,471  $ 39,692  $ 128,561
         
Other Data:        
Earnings per common share - basic  $ 0.78  $ 0.89  $ 0.75  $ 2.41
Earnings per common share - diluted  $ 0.77  $ 0.88  $ 0.74  $ 2.39
Dividends paid per common share  $ 0.20  $ 0.20  $ 0.20  $ 0.60
Common dividend payout ratio  25.70 %  22.40 %  26.65 %  24.77 %
Return on average assets  0.71 %  0.87 %  0.75 %  0.78 %
Return on average common shareholders' equity  7.85 %  9.39 %  8.16 %  8.46 %
Net interest margin (Fully taxable-equivalent)  3.79 %  3.85 %  3.84 %  3.82 %
Full-time equivalent employees  3,287  3,328  3,258  
           
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 (expense), 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
(In thousands) Third
Quarter
Second
Quarter
First
Quarter
Assets      
Cash and due from banks  $ 249,496  $ 181,203  $ 203,600
Federal funds sold 100,000 123,000 100,000
Due from banks - interest-bearing 144,754 725,304 743,569
Securities available-for-sale 7,185,288 6,348,055 5,849,390
Trading securities 93,707 125,829 81,287
Loans and leases:      
Commercial 5,166,802 4,800,252 4,468,177
Commercial real estate mortgages 2,059,114 1,930,269 1,902,862
Residential mortgages 3,742,768 3,710,765 3,603,058
Real estate construction 335,712 355,014 415,241
Equity lines of credit 728,890 735,899 733,567
Installment 130,923 130,924 146,779
Loans and leases, excluding covered loans 12,164,209 11,663,123 11,269,684
Allowance for loan and lease losses (263,348) (265,933) (263,356)
Loans and leases, excluding covered loans, net 11,900,861 11,397,190 11,006,328
Covered loans, net (1) 1,550,103 1,657,004 1,684,068
Net loans and leases 13,450,964 13,054,194 12,690,396
Premises and equipment, net 140,871 134,511 131,345
Goodwill and other intangibles 524,103 526,207 527,419
Other real estate owned (2) 147,369 162,541 178,164
FDIC indemnification asset 212,809 261,734 270,576
Other assets 854,899 883,511 860,186
Total assets  $ 23,104,260  $ 22,526,089  $ 21,635,932
       
Liabilities      
Deposits:      
Noninterest-bearing  $ 10,308,547  $ 9,403,425  $ 8,756,877
Interest-bearing 9,600,534 9,861,695 9,721,062
Total deposits 19,909,081 19,265,120 18,477,939
Short-term borrowings 30,640 149,771 151,663
Long-term debt 699,983 701,829 703,173
Other liabilities 301,387 281,622 246,517
Total liabilities 20,941,091 20,398,342 19,579,292
       
Redeemable noncontrolling interest 42,704 43,737 46,013
       
Equity      
City National Corporation shareholders' equity:      
Common stock 53,886 53,886 53,886
Additional paid-in capital 489,037 485,064 480,918
Retained earnings 1,578,747 1,547,989 1,511,153
Accumulated other comprehensive income 82,467 56,293 26,535
Treasury shares (83,672) (84,311) (86,954)
Total common shareholders' equity 2,120,465 2,058,921 1,985,538
 Total shareholders' equity 2,120,465 2,058,921 1,985,538
Noncontrolling interest  -- 25,089 25,089
Total equity 2,120,465 2,084,010 2,010,627
Total liabilities and equity  $ 23,104,260  $ 22,526,089  $ 21,635,932
       
(1) Covered loans are net of $61.8 million, $67.6 million and $82.0 million of allowance for loan losses as of September 30, 2011, June 30, 2011 and March 31, 2011, respectively.
(2) Other real estate owned includes $102.8 million, $114.9 million and $121.8 million covered by FDIC loss share at September 30, 2011, June 30, 2011 and March 31, 2011, respectively.
         
CITY NATIONAL CORPORATION        
CONSOLIDATED PERIOD END BALANCE SHEET        
(unaudited)        
  2010
(In thousands) Fourth
Quarter
Third
Quarter
Second
Quarter
First
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
(Dollars in thousands) Third
Quarter
Second
Quarter
First
Quarter
Year To
Date
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Year To
Date
                   
Allowance for Loan and Lease Losses, Excluding Covered Loans                  
                   
Balance at beginning of period $ 265,933 $ 263,356 $ 257,007 $ 257,007 $ 274,167 $ 290,492 $ 292,799 $ 288,493 $ 288,493
                   
Net (charge-offs)/recoveries:                  
Commercial (2,915)  2,616 (1,937) (2,236) (6,510) (17,871) (21,290) (17,625) (63,296)
Commercial real estate mortgages (452)  1,269  6,212  7,029 (5,275) (8,954) (402) (14,967) (29,598)
Residential mortgages (163) (253) (615) (1,031) (624) (572) (610) (1,391) (3,197)
Real estate construction (6,233)  577  3,826 (1,830) (5,496)  39 (10,944) (14,183) (30,584)
Equity lines of credit (512) (120) (757) (1,389) (628) (793) (337) (210) (1,968)
Installment (309)  106 (202) (405) (499) (83)  88 (1,160) (1,654)
Total net (charge-offs)/recoveries (10,584)  4,195  6,527  138 (19,032) (28,234) (33,495) (49,536) (130,297)
                   
Provision for credit losses  7,500  --  --  7,500  3,000  13,000  32,000  55,000  103,000
                   
Transfers from (to) reserve for off-balance sheet credit commitments  499 (1,618) (178) (1,297) (1,128) (1,091) (812) (1,158) (4,189)
                   
Balance at end of period $ 263,348 $ 265,933 $ 263,356 $ 263,348 $ 257,007 $ 274,167 $ 290,492 $ 292,799 $ 257,007
                   
Net (Charge-Offs)/Recoveries to Average Total Loans and Leases, Excluding Covered Assets (annualized):                
                   
Commercial (0.23) % 0.22 %  (0.18) %  (0.06) %  (0.59) %  (1.66) %  (1.97) %  (1.57) %  (1.44) %
Commercial real estate mortgages (0.09) % 0.27 % 1.31 % 0.49 %  (1.07) %  (1.75) %  (0.08) %  (2.82) %  (1.44) %
Residential mortgage (0.02) %  (0.03) %  (0.07) %  (0.04) %  (0.07) %  (0.06) %  (0.07) %  (0.16) %  (0.09) %
Real estate construction (7.14) % 0.59 % 3.46 %  (0.62) %  (4.05) % 0.03 %  (6.36) %  (7.12) %  (4.63) %
Equity lines of credit (0.28) %  (0.07) %  (0.42) %  (0.25) %  (0.34) %  (0.42) %  (0.18) %  (0.12) %  (0.26) %
Installment (0.94) % 0.32 %  (0.55) %  (0.39) %  (1.18) %  (0.19) % 0.21 %  (2.77) %  (0.98) %
Total loans and leases, excluding covered loans (0.36) % 0.15 % 0.24 % 0.00 %  (0.66) %  (0.98) %  (1.16) %  (1.68) %  (1.13) %
                   
Reserve for Off-Balance Sheet Credit Commitments                  
                   
Balance at beginning of period  $ 23,325  $ 21,707  $ 21,529  $ 21,529  $ 20,401  $ 19,310  $ 18,498  $ 17,340  $ 17,340
Transfers (to) from allowance (499)  1,618  178  1,297  1,128  1,091  812  1,158  4,189
Balance at end of period  $ 22,826  $ 23,325  $ 21,707  $ 22,826  $ 21,529  $ 20,401  $ 19,310  $ 18,498  $ 21,529
                   
Allowance for Losses on Covered Loans                  
                   
Balance at beginning of period  $ 67,629  $ 82,016  $ 67,389  $ 67,389  $ 50,057  $ 46,255  $ --  $ --  $ --
Provision for losses  5,147  1,716  19,116  25,979  21,469  8,233  46,516  --  76,218
Net (charge-offs)/recoveries (325)  --  -- (325)  -- (414)  --  -- (414)
Reduction in allowance due to loan removals (10,698) (16,103) (4,489) (31,290) (4,137) (4,017) (261)  -- (8,415)
Balance at end of period  $ 61,753  $ 67,629  $ 82,016  $ 61,753  $ 67,389  $ 50,057  $ 46,255  $ --  $ 67,389
                   
Note: Certain prior period balances have been reclassified to conform to current period presentation.                  
               
CITY NATIONAL CORPORATION              
NONPERFORMING ASSETS              
(unaudited)              
  2011 2010
(Dollars in thousands) Third
Quarter
Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
               
Nonperforming assets, excluding covered assets              
Nonaccrual loans, excluding covered loans              
Commercial  $ 34,937  $ 24,337  $ 19,297  $ 21,739  $ 30,054  $ 47,667  $ 73,838
Commercial real estate mortgages  20,746  26,676  28,028  44,882  50,366  57,155  66,194
Residential mortgages  10,512  14,211  14,544  18,721  16,259  11,506  12,045
Real estate construction  70,827  60,543  81,448  98,209  135,778  138,909  164,985
Equity lines of credit  8,401  6,668  6,676  6,782  5,584  3,909  4,089
Installment  707  365  7,399  590  1,064  972  8,865
Total nonaccrual loans, excluding covered loans  146,130  132,800  157,392  190,923  239,105  260,118  330,016
               
Other real estate owned, excluding covered OREO  44,521  47,634  56,342  57,317  58,462  54,451  58,025
               
Total nonperforming assets, excluding covered assets $ 190,651  $ 180,434  $ 213,734  $ 248,240  $ 297,567  $ 314,569  $ 388,041
               
Nonperforming covered assets              
Nonaccrual loans  $ 1,023  $ 1,408  $ 2,343  $ 2,557  $ 2,633  $ --  $ --
Other real estate owned  102,848  114,907  121,822  120,866  110,391  98,841  77,526
Total nonperforming covered assets  $ 103,871  $ 116,315  $ 124,165  $ 123,423  $ 113,024  $ 98,841  $ 77,526
               
Loans 90 days or more past due on accrual status, excluding covered loans  $ 379  $ 7,214  $ 3,679  $ 2,499  $ 1,020  $ 789  $ 1,712
               
Covered loans 90 days or more past due on accrual status  $ 336,193  $ 368,379  $ 390,267  $ 399,019  $ 416,875  $ 362,722  $ 323,620
               
               
Allowance for loan and lease losses as a percentage of:              
Nonaccrual loans  180.21 %  200.25 %  167.32 %  134.61 %  114.66 %  111.68 %  88.72 %
Total nonperforming assets, excluding covered assets  138.13 %  147.39 %  123.22 %  103.53 %  92.14 %  92.35 %  75.46 %
Total loans and leases, excluding covered loans  2.16 %  2.28 %  2.34 %  2.26 %  2.40 %  2.53 %  2.50 %
               
Nonaccrual loans as a percentage of total loans, excluding covered loans  1.20 %  1.14 %  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  1.56 %  1.54 %  1.89 %  2.17 %  2.59 %  2.73 %  3.30 %
Total assets  0.83 %  0.80 %  0.99 %  1.16 %  1.36 %  1.48 %  1.93 %
               
Note: Certain prior period balances have been reclassified to conform to current period presentation.              
                 
CITY NATIONAL CORPORATION                
AVERAGE BALANCES AND RATES                
(unaudited)                  
    2011
    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
Assets                  
Interest-earning assets                   
Loans and leases                   
Commercial     $ 4,928  4.09 %  $ 4,693  4.22 %  $ 4,437  4.30 %  $ 4,688  4.20 %
Commercial real estate mortgages  1,944  5.30  1,904  5.67  1,924  5.56  1,924  5.51
Residential mortgages    3,717  4.74  3,663  4.78  3,563  4.81  3,648  4.78
Real estate construction    347  4.65  395  5.10  448  4.56  396  4.77
Equity lines of credit    731  3.55  730  3.59  733  3.57  732  3.57
Installment     130  4.94  131  4.88  151  4.81  137  4.88
Total loans and leases, excluding covered loans  11,797  4.47  11,516  4.64  11,256  4.67  11,525  4.59
Covered loans    1,664  10.65  1,770  8.70  1,811  7.78  1,748  9.01
Total loans and leases     13,461  5.23  13,286  5.19  13,067  5.11  13,273  5.18
Due from banks - interest-bearing  642  0.29  526  0.31  490  0.25  553  0.28
Federal funds sold and securities purchased under resale agreements  130  0.28  143  0.28  232  0.27  168  0.27
Securities available-for-sale  6,883  2.47  6,155  2.67  5,631  2.77  6,228  2.63
Trading securities    71  0.58  69  1.45  62  0.85  67  0.96
Other interest-earning assets  130  2.09  135  2.09  139  2.04  135  2.07
Total interest-earning assets  21,317  4.12  20,314  4.23  19,621  4.24  20,424  4.19
Allowance for loan and lease losses (330)   (344)   (329)   (334)  
Cash and due from banks  203    184    201    196  
Other non-earning assets  1,809    1,856    1,885    1,849  
Total assets    $ 22,999    $ 22,010    $ 21,378    $ 22,135  
                   
Liabilities and Equity                  
Interest-bearing deposits                
Interest checking accounts $ 1,727  0.15 %  $ 1,707  0.17 %  $ 1,772  0.19 %  $ 1,735  0.17 %
Money market accounts    6,900  0.35  6,683  0.43  6,452  0.45  6,680  0.41
Savings deposits    329  0.29  327  0.32  303  0.34  320  0.32
Time deposits - under $100,000  280  0.48  308  0.49  325  0.56  304  0.51
Time deposits -- $100,000 and over  801  0.61  833  0.70  823  0.75  819  0.69
Total interest-bearing deposits  10,037  0.34  9,858  0.41  9,675  0.43  9,858  0.39
                   
Federal funds purchased and securities sold under repurchase agreements  --  0.07  10  0.07  -- 0.00  4  0.07
Other borrowings    804  4.46  855  4.36  858  4.41  839  4.41
Total interest-bearing liabilities  10,841  0.64  10,723  0.72  10,533  0.75  10,701  0.70
Noninterest-bearing deposits  9,688    8,927    8,509    9,045  
Other liabilities    353    307    338    332  
Total equity    2,117    2,053    1,998    2,057  
Total liabilities and equity  $ 22,999    $ 22,010    $ 21,378    $ 22,135  
                   
Net interest spread      3.48 %    3.51 %    3.49 %    3.49 %
Net interest margin      3.79 %    3.85 %    3.84 %    3.82 %
                   
Average prime rate      3.25 %    3.25 %    3.25 %    3.25 %
                     
CITY NATIONAL CORPORATION                    
AVERAGE BALANCES AND RATES                    
(unaudited)                    
  2010
  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   $ 4,392  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
  Third
Quarter
Second
Quarter
First
Quarter
Year To
Date
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Year To
Date
Per Common Share:                  
Shares Outstanding (in thousands):                  
Average - Basic  52,481  52,462  52,320  52,422  52,154  52,105  52,012  51,690  51,992
Average - Diluted  52,720  52,977  52,894  52,882  52,680  52,498  52,542  52,092  52,455
Period-end  52,484  52,475  52,440    52,247  52,114  52,089  51,888  
Book value for common shareholders  $ 40.40  $ 39.24  $ 37.86    $ 37.51  $ 37.46  $ 36.51  $ 35.43  
Closing price:                  
High  $ 55.54  $ 58.75  $ 62.90  $ 62.90  $ 62.91  $ 58.00  $ 64.13  $ 54.86  $ 64.13
Low  37.76  52.02  55.65  37.76  51.57  47.91  51.23  45.81  45.81
Period-end  37.76  54.25  57.05    61.36  53.07  51.23  53.97  
                   
                   
Capital Ratios (Dollars in millions):                  
Risk-based capital                  
Risk-weighted assets (1)  $ 14,866  $ 14,286  $ 13,551    $ 13,712  $ 13,788  $ 13,807  $ 13,856  
Tier 1 common shareholders' equity  $ 1,530  $ 1,493  $ 1,449    $ 1,412  $ 1,373  $ 1,337  $ 1,309  
Percentage of risk-weighted assets (2)  10.29 %  10.45 %  10.69 %    10.29 %  9.96 %  9.68 %  9.44 %  
Tier 1 capital  $ 1,535  $ 1,523  $ 1,479    $ 1,442  $ 1,651  $ 1,614  $ 1,586  
Percentage of risk-weighted assets  10.32 %  10.66 %  10.91 %    10.52 %  11.97 %  11.69 %  11.44 %  
Total capital  $ 1,922  $ 1,905  $ 1,853    $ 1,821  $ 2,032  $ 2,027  $ 1,998  
Percentage of risk-weighted assets  12.93 %  13.34 %  13.68 %    13.28 %  14.74 %  14.68 %  14.42 %  
Tier 1 leverage ratio  6.82 %  7.09 %  7.09 %    6.74 %  7.82 %  7.96 %  8.03 %  
                   
Period-end equity to period-end assets  9.18 %  9.25 %  9.29 %    9.29 %  9.06 %  9.08 %  9.29 %  
Period-end common shareholders' equity to period-end assets  9.18 %  9.14 %  9.18 %    9.18 %  8.94 %  8.96 %  9.16 %  
                   
Average equity to average assets  9.21 %  9.33 %  9.35 %  9.29 %  9.12 %  9.07 %  9.05 %  9.88 %  9.27 %
Average common shareholders' equity to average assets  9.10 %  9.22 %  9.23 %  9.18 %  9.01 %  8.95 %  8.93 %  9.10 %  8.99 %
                   
Period-end tangible equity to period-end tangible assets (2)  7.07 %  7.08 %  7.03 %    6.99 %  6.83 %  6.77 %  6.86 %  
                   
Average tangible equity to average tangible assets (2)  7.08 %  7.11 %  7.05 %  7.08 %  6.89 %  6.81 %  6.70 %  7.49 %  6.96 %
                   
                   
Senior Debt Credit Ratings                  
For The Period Ended September 30, 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 15 and 16 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
(Dollars in thousands, except per share amounts) Third
Quarter
Second
Quarter
First
Quarter
Year to
Date
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Year to
Date
Basic EPS:                  
Net income attributable to City National Corporation  $ 41,398  $ 47,471  $ 39,692  $ 128,561  $ 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  $ 41,398  $ 47,471  $ 39,692  $ 128,561  $ 39,743  $ 34,418  $ 41,318  $ 9,996  $ 125,475
Less: Earnings allocated to participating securities  655  759  578  1,988  532  447  535  113  1,605
Earnings allocated to common shareholders  $ 40,743  $ 46,712  $ 39,114  $ 126,573  $ 39,211  $ 33,971  $ 40,783  $ 9,883  $ 123,870
                   
Weighted average common shares outstanding  52,481  52,462  52,320  52,422  52,154  52,105  52,012  51,690  51,992
                   
Basic earnings per common share  $ 0.78  $ 0.89  $ 0.75  $ 2.41  $ 0.75  $ 0.65  $ 0.78  $ 0.19  $ 2.38
                   
Diluted EPS:                  
Earnings allocated to common shareholders (1)  $ 40,745  $ 46,718  $ 39,119  $ 126,586  $ 39,216  $ 33,974  $ 40,787  $ 9,883  $ 123,882
                   
Weighted average common shares outstanding  52,481  52,462  52,320  52,422  52,154  52,105  52,012  51,690  51,992
Dilutive effect of equity awards  239  515  574  460  526  393  530  402  463
Weighted average diluted common shares outstanding  52,720  52,977  52,894  52,882  52,680  52,498  52,542  52,092  52,455
                   
Diluted earnings per common share  $ 0.77  $ 0.88  $ 0.74  $ 2.39  $ 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      
SELECTED FINANCIAL INFORMATION ON COVERED ASSETS      
(unaudited)      
       
The following table provides selected components of income and expense related to covered assets:    
       
  2011
(in thousands) Third
Quarter
Second
Quarter
First
Quarter
Interest income (1)      
Income on loans paid-off or fully charged-off  $ 18,343  $ 11,105  $ 7,389
       
Provision for losses on covered loans      
Provision for losses on covered loans  5,147  1,716  19,116
       
Noninterest income related to covered assets      
       
FDIC loss sharing (expense) income, net      
(Loss) gain on indemnification asset  $ (384)  $ 1,687  $ 15,048
Indemnification asset accretion  (4,043)  (4,126)  (3,624)
Net FDIC reimbursement for OREO and loan expenses  10,496  17,852  11,118
Removal of indemnification asset on loans  (13,931)  (15,161)  (11,186)
Removal of indemnification asset on OREO and net reimbursement to FDIC for OREO sales  (2,823)  (7,219)  (1,282)
Loan recoveries shared with FDIC  (3,153)  (3,197)  (1,971)
Increase in FDIC clawback liability  (353)  (503)  (276)
Other  --   (17)  778
Total FDIC loss sharing (expense) income, net  (14,191)  (10,684)  8,605
       
Gain on disposal of assets      
Net gain on sale of OREO  3,625  9,092  1,628
       
Gain on acquisition  --   8,164  -- 
       
Other income      
Net gain on transfers of covered loans to OREO  3,887  12,817  10,330
Amortization of fair value on acquired unfunded loan commitments  1,088  766  692
OREO income  379  637  661
Other  (503)  (690)  29
Total other income  4,851  13,530  11,712
       
Total noninterest income related to covered assets  $ (5,715)  $ 20,102  $ 21,945
       
Noninterest expense related to covered assets (2)      
       
Other real estate owned      
Valuation write-downs  $ 7,526  $ 15,628  8,305
Holding costs and foreclosure expense  3,449  4,564  4,493
Total other real estate owned  10,975  20,192  12,798
       
Legal and professional fees  2,961  2,832  1,819
       
Other operating expense      
Other covered asset expenses  18  (70)  92
       
Total noninterest expense related to covered assets (3)  $ 13,954  $ 22,954  $ 14,709
       
(1) Excludes core yield in interest income related to covered loans.      
(2) OREO, legal and professional fees and other expenses related to covered assets must meet certain FDIC criteria in order for the expense amounts to be reimbursed. Certain amounts reflected in these categories may not be reimbursed by the FDIC.
(3) Excludes personnel and other corporate overhead expenses that the Company incurs to service covered assets and costs associated with the branches acquired in FDIC-assisted acquisitions.
                   
                   
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
(Dollars in thousands) Third
Quarter
Second
Quarter
First
Quarter
Year to
Date
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Year to
Date
Period End:                  
Total equity  $ 2,120,465  $ 2,084,010  $ 2,010,627    $ 1,984,718  $ 1,977,163  $ 1,926,960  $ 1,863,411  
Less: Goodwill and other intangibles  (524,103)  (526,207)  (527,419)    (528,634)  (522,592)  (524,820)  (523,135)  
Tangible equity (A)  1,596,362  1,557,803  1,483,208    1,456,084  1,454,571  1,402,140  1,340,276  
                   
Total assets  $ 23,104,260  $ 22,526,089  $ 21,635,932    $ 21,353,118  $ 21,823,616  $ 21,231,447  $ 20,066,475  
Less: Goodwill and other intangibles  (524,103)  (526,207)  (527,419)    (528,634)  (522,592)  (524,820)  (523,135)  
Tangible assets (B)  $ 22,580,157  $ 21,999,882  $ 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)  7.07% 7.08% 7.03%   6.99% 6.83% 6.77% 6.86%  
                   
Average Balance:                  
Total equity  $ 2,117,249  $ 2,053,447  $ 1,998,006  $ 2,056,671  $ 1,999,494  $ 1,960,206  $ 1,881,635  $ 2,003,150  $ 1,961,109
Less: Goodwill and other intangibles  (525,300)  (527,072)  (528,205)  (526,848)  (525,747)  (523,855)  (522,311)  (524,838)  (524,189)
Tangible equity (C)  1,591,949  1,526,375  1,469,801  1,529,823  1,473,747  1,436,351  1,359,324  1,478,312  1,436,920
                   
Total assets  $ 22,998,562  $ 22,009,749  $ 21,377,904  $ 22,134,675  $ 21,922,240  $ 21,614,748  $ 20,799,187  $ 20,267,248  $ 21,156,661
Less: Goodwill and other intangibles  (525,300)  (527,072)  (528,205)  (526,848)  (525,747)  (523,855)  (522,311)  (524,838)  (524,189)
Tangible assets (D)  $ 22,473,262  $ 21,482,677  $ 20,849,699  $ 21,607,827  $ 21,396,493  $ 21,090,893  $ 20,276,876  $ 19,742,410  $ 20,632,472
                   
Average tangible equity to average tangible assets (C)/(D) 7.08% 7.11% 7.05% 7.08% 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 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  
(Dollars in thousands) Third
Quarter
Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
 
Tier 1 capital  $ 1,534,831  $ 1,523,269  $ 1,478,820  $ 1,441,837  $ 1,650,793  $ 1,614,341  $ 1,585,727  
Less: Noncontrolling interest  --  (25,089)  (25,089)  (25,139)  (25,189)  (25,088)  (25,088)  
Less: Trust preferred securities  (5,155)  (5,155)  (5,155)  (5,155)  (252,115)  (252,088)  (252,062)  
Tier 1 common shareholders' equity (A)  $ 1,529,676  $ 1,493,025  $ 1,448,576  $ 1,411,543  $ 1,373,489  $ 1,337,165  $ 1,308,577  
                 
Risk-weighted assets (B)  $ 14,866,356  $ 14,285,572  $ 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) 10.29% 10.45% 10.69% 10.29% 9.96% 9.68% 9.44%  
                 
(c) Noninterest income, excluding gain on acquisition              
                 
Noninterest income for the third quarter of 2011 was $69.6 million, a decrease of 24 percent from the second quarter of 2011 but an increase of 4 percent compared to the third quarter of 2010. Noninterest income for the second quarter of 2011 and third quarter of 2010 included gains on acquisition of $8.2 million and $2.1 million, respectively. Excluding these items, noninterest income for the third quarter of 2011 decreased 17 percent from the second quarter of 2011 and increased 8 percent from the third quarter of 2010.
                 
Management believes this non-GAAP financial measure enhances the comparability of the financial results with prior periods as well as to highlight the effects of unusual items in the periods presented. The Company believes that investors may find it useful to see this non-GAAP financial measure to analyze the Company's underlying financial performance without the impact of unusual items.

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: 10733405