-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q6zUoT190kj1HUXfzzVOK8zvPpF8V+I3K3hShtHweYEW0TLudh8dhwK1HMtcYZPO a0Q98JNjSRAM8zjjvp7uZQ== 0001157523-04-003222.txt : 20040414 0001157523-04-003222.hdr.sgml : 20040414 20040414164141 ACCESSION NUMBER: 0001157523-04-003222 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040414 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20040414 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CITY NATIONAL CORP CENTRAL INDEX KEY: 0000201461 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 952568550 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10521 FILM NUMBER: 04733499 BUSINESS ADDRESS: STREET 1: 400 N ROXBURY DR CITY: BEVERLY HILLS STATE: CA ZIP: 90210 BUSINESS PHONE: 3108886000 MAIL ADDRESS: STREET 1: 400 N ROXBURY DR CITY: BEVERLY HILLS STATE: CA ZIP: 90210 8-K 1 a4615574.txt CITY NATIONAL BANK 8-K DOCUMENT United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): April 14, 2004 CITY NATIONAL CORPORATION -------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 1-10521 95-2568550 - ---------------------------------- ------------------- --------------------- (State or other jurisdiction of (Commission file (IRS employer incorporation) number) identification no.) City National Center 400 North Roxbury Drive, Beverly Hills, California 90210 - ----------------------------------------------------- ------------------------ (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (310) 888-6000 --------------------- Not applicable -------------------------------------------- (former name or former address, if changed since last report) Item 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 99.1 Press release dated April 14, 2004 reporting the financial results of City National Corporation for the quarter ending March 31, 2004. Item 9 and 12. REGULATION FD DISCLOSURE AND RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On April 14, 2004, City National Corporation issued a press release reporting its financial results for the quarter ending March 31, 2004. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. This information is being furnished under both Item 9 (Regulation FD Disclosure) and Item 12 (Results of Operations and Financial Condition) of Form 8-K. The information in this Current Report, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CITY NATIONAL CORPORATION April 14, 2004 /s/ Stephen D. McAvoy ---------------------------------------------------- Stephen D. McAvoy Acting Chief Financial Officer and Controller (Authorized Officer and Principal Financial Officer) EX-99.1 3 a4615574ex99.txt PRESS RELEASE Exhibit 99.1 City National Corporation Reports Net Income of $50.9 Million and EPS of $1.00 for the First Quarter of 2004 LOS ANGELES--(BUSINESS WIRE)--April 14, 2004-- Net Income Grew 17 Percent; EPS Up 15 Percent From First Quarter 2003 City National Corporation (NYSE:CYN), parent company of wholly owned City National Bank, today reported net income of $50.9 million, or $1.00 per share, for the first quarter of 2004 compared with $43.7 million, or $0.87 per share, for the first quarter of 2003 and $44.4 million, or $0.87 per share, for the fourth quarter of 2003. HIGHLIGHTS -- Average deposits were up 12 percent and average core deposits were up 16 percent from the same period a year ago. -- Average loans came to nearly $7.9 billion for the first quarter of 2004, $280.9 million higher than the fourth quarter 2003 total of $7.6 billion. Period-end loan balances at March 31, 2004 of $8.0 billion increased $84.9 million from $7.9 billion at December 31, 2003. -- No provision for credit losses was recorded for the first quarter of 2004, a result of continued strong credit quality and an appropriate allowance for credit losses. Net loan charge-offs were $0.9 million for the quarter. Nonaccrual loans were $42.7 million, down 57 percent from March 31, 2003, and up 1 percent from December 31, 2003. -- Average securities for the first quarter of 2004 were up 43 percent from the prior-year quarter due to higher deposit balances, and were up 1 percent from the fourth quarter of 2003. The average duration of the total available-for-sale securities portfolio at March 31, 2004 was 3.1 years. -- First-quarter noninterest income rose 19 percent over the same period a year ago. Assets under management and administration surpassed $30 billion for the first time. First-quarter 2004 results include the operations of Convergent Capital Management LLC ("CCM") while first-quarter 2003 results do not include any CCM results since the acquisition was not completed until April 1, 2003. "Very good credit quality, coupled with the strong growth in deposits and wealth management revenue, helped produce solid double-digit net income gains in the first quarter of 2004 over 2003," said Chief Executive Officer Russell Goldsmith. "In addition, we believe that improving economic conditions and business confidence should lead to increasing loan totals as the year goes on. "City National's commitment to capital management and shareholder value was demonstrated again in the first quarter with both the authorization to repurchase another 1 million shares and the 14 percent increase of our quarterly cash dividend, which is now 52 percent higher than it was one year ago." For the three For the three months ended months ended Dollars in millions, March 31, December 31, except per share 2003 --------------------- % Change 2004 2003 - ------------------------------ ---------- ---------- ------ ---------- Earnings Per Share $1.00 $0.87 15 $0.87 Net Income 50.9 43.7 17 44.4 Average Assets 12,606.8 11,480.6 10 12,756.6 Return on Average Assets 1.62 % 1.54 % 5 1.38 % Return on Average Equity 16.75 15.84 6 14.69 As previously disclosed, in 2004 the company is continuing its practice, adopted in the fourth quarter of 2003, of not recognizing tax benefits associated with its real estate investment trusts ("REITS") in its financial statements. First-quarter 2003 results included $2.8 million in net income, or $0.06 per share, from tax benefits of the company's two REITS. Fourth-quarter 2003 results included a net charge of $8.1 million, or $0.16 per share, from the reversal of the REIT tax benefits recognized in the first three quarters of 2003. The Bank's prime rate was 4.00 percent as of March 31, 2004, compared with 4.25 percent a year earlier. Return on average assets and the return on average shareholders' equity for the first quarter of 2004 increased from the same period a year ago due to higher net income. ASSETS Average assets were higher than the first quarter of 2003, primarily due to an increase in deposits, which were invested in securities and, to a lesser extent, federal funds sold. Total assets at March 31, 2004 increased 10 percent to $13.2 billion from $12.0 billion at March 31, 2003 and increased 2 percent from $13.0 billion at December 31, 2003. REVENUES First-quarter revenues (net interest income plus noninterest income) increased 6 percent to $177.5 million, compared with $167.2 million for the same period in 2003 due to higher net interest income, and noninterest income from the acquisition of CCM. Revenues were down 1 percent from the fourth quarter of 2003 due to the absence of participating mortgage loan ("PML") fees in the first quarter of 2004. (These are fees earned upon completion of certain real estate construction projects and repayment of debt where the company participates in the profits of the project by funding a portion of the equity requirement for the project.) NET INTEREST INCOME Fully taxable-equivalent net interest income for the first quarter of 2004 was $134.3 million, compared with $131.9 million for the first quarter of 2003 and $134.0 for the fourth quarter of 2003. For the three months For the ended three March 31, months % ended Dollars in millions Change December 2004 2003 31, 2003 - ------------------------------ ---------- ---------- ------ ---------- Average Loans $7,886.3 $7,964.3 (1) $7,605.4 Average Securities 3,462.5 2,415.0 43 3,424.3 Average Deposits 10,533.5 9,373.8 12 10,694.0 Average Core Deposits 9,621.2 8,326.5 16 9,737.3 Fully Taxable-Equivalent Net Interest Income 134.3 131.9 2 134.0 Net Interest Margin 4.66 % 5.07 % (8) 4.52 % Average loans for the first quarter of 2004 were slightly lower than they were in the first-quarter of 2003, but increased 4 percent from the fourth quarter of 2003. Compared with the prior-year first-quarter averages, residential first mortgage loans rose 11 percent, real estate mortgage loans rose 5 percent; real estate construction loans rose 2 percent; and commercial loans decreased 11 percent. Compared with the fourth quarter of 2003, average loans increased in all categories except installment loans. Period-end March 31, 2004 loans increased $84.9 million from December 31, 2003, reflecting growth in residential first mortgage, real estate mortgage, and real estate construction loans. Average securities increased 43 percent for the first quarter of 2004 compared with the same period for 2003 primarily due to higher deposit balances. Average securities were slightly higher than the fourth quarter of 2003. As of March 31, 2004, unrealized gains on securities available-for-sale were $48.7 million. The average duration of total available-for-sale securities at March 31, 2004 was 3.1 years compared to 3.4 years at December 31, 2003 and 2.3 years at March 31, 2003. Average deposits during the first quarter of 2004 increased 12 percent over the same period last year and were down 2 percent from the fourth quarter of 2003, the latter change reflecting historical seasonal trends. Average core deposits represented 91 percent, 89 percent, and 91 percent of the total average deposit base for the first quarters of 2004 and 2003, and the fourth quarter of 2003, respectively. New clients and higher client balances maintained as deposits to pay for services contributed to the year-over-year growth of deposits. The net interest margin was slightly higher than the fourth quarter of 2003 due to higher yielding interest-earning assets. As part of the company's long-standing asset liability management strategy, its "plain vanilla" interest rate swaps hedging loans, deposits and borrowings, with a notional value of $1.1 billion, added $8.3 million to net interest income in the first quarter of 2004, compared with $7.5 million in the first quarter of 2003 and $8.3 million in the fourth quarter of 2003. These amounts included $6.0 million, $4.5 million, and $6.1 million, respectively, for interest swaps qualifying as fair value hedges. Income from swaps qualifying as cash-flow hedges was $2.3 million for the first quarter of 2004, compared with $3.0 million for the first quarter of 2003, and $2.2 million for the fourth quarter of 2003. Income from existing swaps qualifying as cash-flow hedges of loans expected to be recorded in net interest income within the next 12 months is $6.5 million. Interest recovered on nonaccrual and charged-off loans included in net interest income for the first quarter of 2004 was $0.7 million, compared with $0.6 million for first quarter of 2003, and $0.3 million for the fourth quarter of 2003. NONINTEREST INCOME In the first quarter of 2004, noninterest income increased to $46.6 million, up 19 percent from $39.0 million in the first quarter of 2003. This growth was mainly attributable to the CCM acquisition which was completed on April 1, 2003. Noninterest income was 3 percent lower than the fourth quarter of 2003 due to the absence of PML fees in the first quarter of 2004. This more than offset an increase in trust and investment fees. As a percentage of total revenues, noninterest income was 26 percent for the first quarter of 2004 compared with 23 percent and 27 percent for the first quarter of 2003 and the fourth quarter of 2003, respectively. Wealth Management At or for the three months ended At or for March 31, the three months % ended Dollars in millions Change December 2004 2003 31, 2003 - -------------------------------- --------- --------- ------ --------- Trust and Investment Fees $15.6 $6.5 138 $14.2 Brokerage and Mutual Fund Fees 8.7 8.9 (2) 9.1 Assets Under Administration 30,532.3 19,840.8 54 28,835.3 Assets Under Management (1)(2) 14,339.3 6,978.0 105 13,610.8 (1) Included above in assets under administration (2) Excludes $3,591 million and $2,858 million of assets under management for the CCM minority-owned asset managers as of March 31, 2004 and December 31, 2003, respectively Assets under management at March 31, 2004 increased from the same period last year primarily due to the CCM acquisition. New business, aided by strong relative investment performance and higher market values, also contributed to the increase during the first quarter of 2004. The trust and investment fee revenue increase over both the first and fourth quarters of 2003 was driven by higher balances under management or administration. Increases in market values are reflected in fee income primarily on a trailing-quarter basis. Brokerage and mutual fund fees are down primarily due to a decline in money-market balances. Other Noninterest Income Cash management and deposit transaction fees for the first quarter of 2004 decreased 1 percent from the first quarter of 2003. Cash management and deposit transaction fees increased 4 percent from the fourth quarter of 2003 due to the recognition in arrears of annual fees. International services fees for the first quarter of 2004 were up 18 percent over the same period last year primarily due to higher foreign exchange and trade finance income. These fees were essentially the same compared with the fourth quarter of 2003. Other income in the first quarter of 2004 declined $1.4 million and $2.9 million from the first quarter and fourth quarter of 2003, respectively. The decline from one year ago was primarily attributable to the absence of $1.2 million of fees received from the sale of certain merchant credit card business and $0.2 million of interest on loans available for sale. The decline from the fourth quarter last year was due primarily to the absence of $2.6 million in PML fees. The company realized $0.6 million in gains on the sale of loans, assets and debt repurchase, and gains on the sale of securities for the first quarter of 2004, compared with $1.3 million in gains for the first quarter of 2003 and $0.5 million in gains for the fourth quarter of 2003. NONINTEREST EXPENSE Noninterest expense was $94.5 million in the first quarter of 2004, up 11 percent from $85.4 million for the first quarter of 2003 and down 1 percent from $95.1 million for the fourth quarter of 2003. Compared with the first quarter of 2003, expenses grew primarily because of the acquisition of CCM. In addition, first-quarter 2004 noninterest expense included the cost of restricted stock awards made in the second quarter of 2003 and the first quarter of 2004. These restricted stock awards continue to replace a portion of the stock option grants that are part of the company's equity compensation program. The efficiency ratio for the first quarter of 2004 was 53.39 percent, compared with 50.28 percent for the first quarter of 2003 and 52.77 percent for the fourth quarter of 2003. The increase in the efficiency ratio over the year ago period is primarily attributable to the acquisition of CCM. INCOME TAXES The first-quarter 2004 effective tax rate was 37.5 percent, compared with 36.6 percent for all of 2003. The effective tax rate reflects changes in the mix of tax rates applicable to income before tax. Quarterly comparisons with the first three quarters of 2003 will be impacted by the real estate investment trust ("REIT") state tax benefits which were added to net income in the first three quarters of 2003 and were reversed in the fourth quarter of 2003. CREDIT QUALITY The company made no provision for credit losses in the first quarter of 2004. This was attributable to the continued strong credit quality of its portfolio; a low level of net charged-off and nonaccrual loans; management's ongoing assessment of the credit quality of the portfolio, modest loan growth and an improving economic environment. Management believes the allowance for credit losses is adequate to cover risks in the portfolio at March 31, 2004. At or for the three months At or ended for the March 31, three months % ended Dollars in millions Change December 31, 2004 2003 2003 - ----------------------------------- -------- -------- ------ --------- Provision For Credit Losses $- $17.5 (100) $- Net Loan Charge-Offs 0.9 12.5 (93) 0.2 Annualized Percentage of Net Charge-Offs to Average Loans 0.05 % 0.64 % (92) 0.01 % Nonperforming Assets $42.7 $99.9 (57) $42.3 Percentage of Nonaccrual Loans and ORE to Total Loans and ORE 0.54 % 1.28 % (58) 0.54 % Allowance for Credit Losses $165.1 $169.5 (3) $166.0 Percentage of Allowance for Credit Losses to Outstanding Loans 2.07 % 2.16 % (4) 2.11 % Percentage of Allowance for Credit Losses to Nonaccrual Loans 386.29 169.93 127 392.65 At March 31, 2004, approximately 40 percent of the nonperforming assets were loans to Northern California clients, and 26 percent were 3 dairy credits. The remaining 34 percent were loans to other borrowers with no major industry concentrations. At March 31, 2004, the company's loan portfolio included approximately $478.7 million of loans managed in Northern California offices. In addition, the portfolio included approximately $138.3 million in outstanding dairy loans, an industry which the company expects to exit over the next 21 months. OUTLOOK Management continues to expect net income per diluted common share for 2004 to be approximately 7 to 9 percent higher than net income per diluted common share for 2003, based on current economic conditions and the business indicators below, which remain as previously indicated except for the provision for credit losses: -- Average loan growth 6 to 9 percent -- Average deposit growth 6 to 9 percent -- Net interest margin 4.50 to 4.70 percent -- Provision for credit losses $10 million to $20 million -- Noninterest income growth 6 to 8 percent -- Noninterest expense growth 8 to 10 percent -- Effective tax rate 36 to 38 percent In light of strong credit quality, the company has reduced its estimated provision for credit losses for 2004. However, the company reaffirms its 2004 earnings per share guidance range at this time. The company considers that it is premature to modify this guidance in light of modest commercial loan demand to date. Our expectations for 2004 are still built on the assumption that short-term interest rates will stay where they are until later this year. An increase in interest rates sooner will increase net interest income since the company is naturally asset-sensitive. CAPITAL LEVELS Total risk-based capital and Tier 1 risk-based capital ratios at March 31, 2004 were 14.39 percent and 10.63 percent, compared with the minimum "well capitalized" capital ratios of 10 percent and 6 percent, respectively. The company's Tier 1 leverage ratio at March 31, 2004 was 7.58 percent. Total risk-based capital, Tier 1 risk-based capital and the Tier 1 leverage ratios at December 31, 2003 were 14.86 percent, 10.81 percent and 7.48 percent, respectively. STOCK REPURCHASE On March 24, 2004, City National Corporation's Board of Directors authorized the repurchase of one million additional shares of City National Corporation stock, following completion of the company's previous buyback initiatives. On January 22, 2003, the Board of Directors had authorized a one-million-share stock buyback program. This program was completed during the first quarter of 2004 with the repurchase of 249,900 shares at an average cost of $58.23. The average cost for the entire one-million-share buyback program was $46.41 per share. On July 15, 2003, the Board of Directors authorized the repurchase of 500,000 additional shares of City National Corporation stock, following completion of the company's January 22, 2003 buyback initiative. During the first quarter of 2004, 483,100 shares were repurchased under this program at an average cost of $59.68 per share leaving 16,900 shares remaining for repurchase before the initiation of the new one million share program. The shares purchased under the buyback programs will be reissued for acquisitions, upon the exercise of stock options, and for other general corporate purposes. There were 1,754,657 treasury shares at March 31, 2004. CONFERENCE CALL City National Corporation will host a conference call this afternoon to discuss results for the first quarter of 2004. The call will begin at 2:00 p.m. PDT. Analysts and investors may dial in and participate in the question/answer session. To access the call, please dial (800) 901-5241 and enter pass code 71982227. 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 is a financial services company with $13.2 billion in total assets. Its wholly owned subsidiary, City National Bank, is California's Premier Private and Business Bank(SM). The bank provides banking, investment, and trust services through 53 offices, including 12 full-service regional centers, in Southern California, the San Francisco Bay Area, and New York City. The company and its affiliates manage or administer more than $30 billion in client trust and investment assets. For more information about City National, visit the company's Web site at cnb.com http://www.cnb.com/. This news release contains forward-looking statements about the company for which the company claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the company's possible or assumed future financial condition, and its results of operations, business and earnings outlook. These forward-looking statements are subject to risks and uncertainties. A number of factors, some of which are beyond the company's ability to control or predict, could cause future results to differ materially from those contemplated by such forward-looking statements. These factors include (1) the unknown economic impact of state, county and city budget issues, (2) changes in interest rates, (3) significant changes in banking laws or regulations, (4) increased competition in the company's market, (5) other-than-expected credit losses, (6) earthquake or other natural disasters impacting the condition of real estate collateral, (7) the effect of acquisitions and integration of acquired businesses, and (8) the impact of proposed and/or recently adopted changes in regulatory, judicial, or legislative tax treatment of business transactions, particularly recently enacted California tax legislation and the December 31, 2003 announcement by the FTB regarding the taxation of REITs and RICs. Management cannot predict at this time the severity or duration of the effects of the recent business slowdown on our specific business activities and profitability. Weaker or a further decline in capital and consumer spending, and related recessionary trends could adversely affect our performance in a number of ways including decreased demand for our products and services and increased credit losses. Likewise, changes in deposit interest rates, among other things, could slow the rate of growth or put pressure on current deposit levels. Forward-looking statements speak only as of the date they are made, and the company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the statements are made, or to update earnings guidance including the factors that influence earnings. For a more complete discussion of these risks and uncertainties, see the company's Annual Report on Form 10-K for the year-ended December 31, 2003, and particularly the section of Management's Discussion and Analysis therein titled "Cautionary Statement for Purposes of the 'Safe Harbor' Provisions of the Private Securities Litigation Reform Act of 1995." CITY NATIONAL CORPORATION - ---------------------------------------------------------------------- CONSOLIDATED BALANCE SHEET (unaudited) (Dollars in thousands, except per share amount) - ---------------------------------------------------------------------- March 31, ----------------------------------- 2004 2003 % Change ------------ ------------ --------- Assets Cash and due from banks $472,541 $448,152 5 Federal funds sold 519,000 615,000 (16) Due from banks - interest bearing 34,570 22,975 50 Securities 3,651,722 2,585,097 41 Loans (net of allowance for credit losses of $165,072 and $169,480) 7,802,567 7,663,343 2 Other assets 740,124 677,905 9 ------------ ------------ Total assets $13,220,524 $12,012,472 10 ============ ============ Liabilities and Shareholders' Equity Noninterest-bearing deposits $5,525,627 $4,625,439 19 Interest-bearing deposits 5,609,050 5,238,407 7 ------------ ------------ Total deposits 11,134,677 9,863,846 13 Federal funds purchased and securities sold under repurchase agreements 88,063 156,002 (44) Other short-term borrowed funds 50,125 140,125 (64) Subordinated debt 300,758 302,573 (1) Other long-term debt 239,804 274,001 (12) Other liabilities / minority interest 167,167 154,236 8 ------------ ------------ Total liabilities 11,980,594 10,890,783 10 Shareholders' equity 1,239,930 1,121,689 11 ------------ ------------ Total liabilities and shareholders' equity $13,220,524 $12,012,472 10 ============ ============ Book value per share $25.54 $23.09 11 Number of shares at period end 48,553,409 48,588,514 - CONSOLIDATED STATEMENT OF INCOME (unaudited) (Dollars in thousands, except per share amount) - ---------------------------------------------------------------------- For the three months ended March 31, ----------------------------------- 2004 2003 % Change ------------ ------------ --------- Interest income $143,797 $145,676 (1) Interest expense (12,825) (17,459) (27) ------------ ------------ Net interest income 130,972 128,217 2 Provision for credit losses - (17,500) (100) ------------ ------------ Net interest income after provision for credit losses 130,972 110,717 18 Noninterest income 46,570 38,976 19 Noninterest expense (94,531) (85,412) 11 Minority interest (1,600) (475) 237 ------------ ------------ Income before taxes 81,411 63,806 28 Income taxes (30,513) (20,151) 51 ------------ ------------ Net income $50,898 $43,655 17 ============ ============ Net income per share, basic $1.04 $0.89 17 ============ ============ Net income per share, diluted $1.00 $0.87 15 ============ ============ Dividends paid per share $0.32 $0.21 52 ============ ============ Shares used to compute per share net income, basic 48,731,524 48,778,986 Shares used to compute per share net income, diluted 50,679,109 50,124,079 CITY NATIONAL CORPORATION - ---------------------------------------------------------------------- SELECTED FINANCIAL INFORMATION (unaudited) (Dollars in thousands) - ---------------------------------------------------------------------- Period end March 31, ----------------------------------- 2004 2003 % Change ------------ ------------ --------- Loans Commercial $3,163,312 $3,401,610 (7) Residential first mortgage 1,977,952 1,762,629 12 Real estate mortgage 2,004,860 1,920,209 4 Real estate construction 741,637 676,618 10 Installment 79,878 71,757 11 ------------ ------------ Total loans $7,967,639 $7,832,823 2 ============ ============ Deposits Noninterest-bearing $5,525,627 $4,625,439 19 Interest-bearing, core 4,760,018 4,182,320 14 ------------ ------------ Total core deposits 10,285,645 8,807,759 17 Time deposits - $100,000 and over 849,032 1,056,087 (20) ------------ ------------ Total deposits $11,134,677 $9,863,846 13 ============ ============ Credit Quality Nonaccrual loans and ORE Nonaccrual loans $42,733 $99,738 (57) ORE - 210 (100) ------------ ------------ Total nonaccrual loans and ORE $42,733 $99,948 (57) ============ ============ Total nonaccrual loans and ORE to total loans and ORE 0.54 1.28 (58) Loans past due 90 days or more on accrual status $5,057 $1,871 170 ============ ============ For the three months ended Allowance for Credit Losses March 31, ----------------------------------- 2004 2003 % Change ------------ ------------ --------- Beginning balance $165,986 $164,502 1 Provision for credit losses - 17,500 (100) Charge-offs (4,349) (14,882) (71) Recoveries 3,435 2,360 46 ------------ ------------ Net charge-offs (914) (12,522) (93) ------------ ------------ Ending Balance $165,072 $169,480 (3) ============ ============ Total net charge-offs to average loans (annualized) (0.05) (0.64) (92) Allowance for credit losses to total loans 2.07 2.16 (4) Allowance for credit losses to nonaccrual loans 386.29 169.93 127 For the three months ended March 31, ----------------------------------- 2004 2003 % Change ------------ ------------ --------- Yields and Rates for the Period Loans 5.47 % 5.98 % (9) Securities 4.58 5.29 (13) Interest-earning assets 5.10 5.75 (11) Interest-bearing deposits 0.71 1.07 (34) Other borrowings 1.97 2.21 (11) Total interest bearing liabilites 0.83 1.19 (30) Net interest margin 4.66 5.07 (8) CITY NATIONAL CORPORATION - ---------------------------------------------------------------------- SELECTED FINANCIAL INFORMATION (unaudited) (Dollars in thousands) - ---------------------------------------------------------------------- For the three months ended March 31, ----------------------------------- 2004 2003 % Change ------------ ------------ --------- Average Balances Loans Commercial $3,172,149 $3,560,411 (11) Residential first mortgage 1,952,305 1,756,838 11 Real estate mortgage 2,001,733 1,908,554 5 Real estate construction 678,479 663,956 2 Installment 81,667 74,579 10 ------------ ------------ Total loans $7,886,333 $7,964,338 (1) ============ ============ Securities $3,462,547 $2,414,970 43 Due from banks - interest bearing 78,348 26,826 192 Interest-earning assets 11,601,877 10,539,123 10 Assets 12,606,754 11,480,626 10 Core deposits 9,621,156 8,326,485 16 Deposits 10,533,471 9,373,839 12 Shareholders' equity 1,222,017 1,117,573 9 Noninterest income Trust and investment fees $15,588 $6,538 138 Brokerage and mutual fund fees 8,726 8,942 (2) Cash management and deposit transaction fees 10,826 10,917 (1) International services 5,126 4,328 18 Bank owned life insurance 831 714 16 Other 4,844 6,205 (22) ------------ ------------ Subtotal - core 45,941 37,644 22 Gain on sale of loans and assets/debt repurchase - 102 (100) Gain on sale of securities 629 1,230 (49) ------------ ------------ Total $46,570 $38,976 19 ============ ============ Total revenue $177,542 $167,193 6 ============ ============ Noninterest expense Salaries and employee benefits $59,676 $51,805 15 ------------ ------------ All Other Net occupancy of premises 7,308 6,969 5 Professional 6,106 6,436 (5) Information services 4,522 4,253 6 Depreciation 3,228 3,119 3 Marketing and advertising 3,507 3,112 13 Office services 2,419 2,570 (6) Amortization of intangibles 1,759 1,976 (11) Equipment 765 666 15 Other operating 5,241 4,506 16 ------------ ------------ Total all other 34,855 33,607 4 ------------ ------------ Total $94,531 $85,412 11 ============ ============ Selected Ratios For the Period Return on average assets 1.62 % 1.54 % 5 Return on average shareholders' equity 16.75 15.84 6 Efficiency ratio (1) 53.39 50.28 6 Dividend payout ratio 30.71 22.91 34 Period End Tier 1 risk-based capital ratio 10.63 10.30 3 Total risk-based capital ratio 14.39 14.46 - Tier 1 leverage ratio 7.58 7.65 (1) (1) The efficiency ratio is defined as noninterest expense excluding ORE expense divided by total revenue (net interest income on a tax-equivalent basis and noninterest income). CONTACT: City National Stephen McAvoy, 213-347-2653 (Financial/Investors) Cary Walker, 213-833-4715 (Media) or Abernathy MacGregor Group Ian Campbell, 213-630-6550 (Financial/Investors) -----END PRIVACY-ENHANCED MESSAGE-----