Russell Goldsmith Chairman and Chief Executive Officer. Christopher J. Carey Chief Financial Officer

Transcription

1 Russell Goldsmith Chairman and Chief Executive Officer Christopher J. Carey Chief Financial Officer Goldman Sachs U.S. Financial Services Conference New York December 10, 2013

2 Why City National? 1. Track record of profitability 2. What we didn t do 3. Uniquely attractive clientele and focus 4. Exceptional deposit base 5. Growing loan portfolio 6. Strong, low-risk balance sheet 7. Excellent capabilities to drive long-term growth 8. Positioned for rising interest rates

3 Why City National? 1. Track record of profitability 2. What we didn t do 3. Uniquely attractive clientele and focus 4. Exceptional deposit base 5. Growing loan portfolio 6. Strong, low-risk balance sheet 7. Excellent capabilities to drive long-term growth 8. Positioned for rising interest rates

4 Why City National? 1. Track record of profitability 2. What we didn t do 3. Uniquely attractive clientele and focus 4. Exceptional deposit base 5. Growing loan portfolio 6. Strong, low-risk balance sheet 7. Excellent capabilities to drive long-term growth 8. Positioned for rising interest rates

5 What We Didn t Do No subprime lending No credit default swaps No toxic securities No exposure to Europe No over-exposure to construction lending

6 Why City National? 1. Track record of profitability 2. What we didn t do 3. Uniquely attractive clientele and focus 4. Exceptional deposit base 5. Growing loan portfolio 6. Strong, low-risk balance sheet 7. Excellent capabilities to drive long-term growth 8. Positioned for rising interest rates

7 Uniquely Attractive Clientele & Focus TOTAL ASSETS Mega-Banks Assets > $100B CLIENTS Fortune 1000 $29.1B Strong Client Focus Businesses: $1M $250M Individuals: Assets > $1M Income > $250K Assets < $5B Community Banks Retail Customers 1 City National s Preferred Banking initiative targets individuals with income of $100,000 or more and investible assets of $250,000 or more.

8 Uniquely Attractive Clientele & Focus Los Angeles County - Population: 10.0 million - Branches: 32 San Francisco Bay Area - Population: 6.0 million - Branches: 12 Orange County/San Diego - Population: 6.3 million - Branches: 15 New York City - Population: 8.3 million - Branches: 2

9 The Economy: Turning the Corner CALIFORNIA NATIONAL NEW YORK 3.5% 2.5% 1.3% Change in Real GDP by State/2012 Change in Real GDP/ 2012 Change in Real GDP by State/ % 7.3% 7.7% Unemployment Rate/ October 2013 (Seasonally Adjusted) Unemployment Rate/ October 2013 (Seasonally Adjusted) Unemployment Rate/ October 2013 (Seasonally Adjusted) Sources: Bureau of Economic Analysis and Bureau of Labor Statistics

10 Uniquely Attractive Clientele & Focus Top 50 Metro Markets 1 (by Number of Millionaire Households) 1. New York et al, NY-NJ-PA 460, Los Angeles-Long Beach et al, CA 251, San Francisco-Oakland et al, CA 125, Atlanta-Sandy Springs et al, GA 106, San Diego-Carlsbad et al, CA 68, Riverside et al, CA 70, San Jose-Sunnyvale et al, CA 52, Las Vegas-Paradise, NV 36, Nashville-Davidson et al, TN 30,451 Source: Phoenix Marketing International, AMS Core Based Statistical Area

11 Uniquely Attractive Clientele & Focus Half of our key clients have banked with us for at least a decade 49% use products from 5 or more of our 12 product categories 54% use both personal and business products

12 Why City National? 1. Track record of profitability 2. What we didn t do 3. Uniquely attractive clientele and focus 4. Exceptional deposit base 5. Growing loan portfolio 6. Strong, low-risk balance sheet 7. Excellent capabilities to drive long-term growth 8. Positioned for rising interest rates

13 Exceptional Deposit Base Low-cost core deposits equal 98% of total balances Average Deposits 25 $ $17.9 $19.3 $21.6 $ in billions $ Q2013 Noninterest Bearing Other Interest Bearing CDs > $100K

14 Why City National? 1. Track record of profitability 2. What we didn t do 3. Uniquely attractive clientele and focus 4. Exceptional deposit base 5. Growing loan portfolio 6. Strong, low-risk balance sheet 7. Excellent capabilities to drive long-term growth 8. Positioned for rising interest rates

15 Growing Loan Portfolio Loan balances have increased for 10 straight quarters Average Loans 1 18 $13.6 $14.0 $14.8 $15.4 $16.0 $ in billions Q2012 4Q2012 1Q2013 2Q2013 3Q2013 Commercial CRE Mortgage Residential Mortgage RE Construction Equity Lines Installment 1. Excluding FDIC-covered loans

16 Why City National? 1. Track record of profitability 2. What we didn t do 3. Uniquely attractive clientele and focus 4. Exceptional deposit base 5. Growing loan portfolio 6. Strong, low-risk balance sheet 7. Excellent capabilities to drive long-term growth 8. Positioned for rising interest rates

17 Strong, Low-Risk Balance Sheet Asset quality remains very sound, substantial reserves NPAs and NCOs 1 Provision and Reserves 1 $ in millions Q12 3Q12 4Q12 1Q13 2Q13 3Q13 (0.08) (0.06) (0.13) (0.20) (0.17) $7.0 $1.0 $2.0 $0.0 $0.0 $0.0 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 NPAs / Total loans NCOs (Net Recoveries) / Avg. loans Provision ($mm) Allowance / Total loans 1 All totals and ratios exclude FDIC-covered assets

18 Strong, Low-Risk Balance Sheet City National already complies with 2019 Basel III standards Nonaccruals to Tier 1 plus ALLL 15% 14.6% 12.4% 10% 9.3% 5% 5.3% 4.7% 6.0% 5.9% 3.1% 0% Q2013 CNB Peer Median Peer Group: National banks with assets of $10-$50 billion Source: Thomson Reuters Bank Insight

19 Why City National? 1. Track record of profitability 2. What we didn t do 3. Uniquely attractive clientele and focus 4. Exceptional deposit base 5. Growing loan portfolio 6. Strong, low-risk balance sheet 7. Excellent capabilities to drive long-term growth 8. Positioned for rising interest rates

20 Investing in New Technologies & Products

21 Banking Office Strategy 3.0 New York - 6 th Avenue New York - Park Avenue

22 Enhancing Industry Specialties & Adding Talented Colleagues Entertainment Real Estate Technology Legal Services Healthcare

23 Enhancing Industry Specialties & Adding Talented Colleagues Serving clients nationwide Equipment leasing Asset-based lending Franchise finance Mortgage warehouse banking

24 Growing Wealth Management Business Serving high-net-worth and institutional clients $ billion Assets Under Management or Administration City National Rochdale Convergent Wealth Advisors Lee Munder Capital Group Matthews International As of September 30, Excludes City National s minority interest in Matthews International ($25.2 billion)

25 Supplementing Organic Growth With Acquisitions First American Lee Munder Rochester Boston Rochdale New York San Francisco San Jose Reno Las Vegas Nevada Commerce Expansion 1 st Pacific Los Angeles Sun West Nashville Expansion Imperial Capital San Diego Datafaction Atlanta Expansion One FDIC, one branch deal in CA Acquired Lee Munder Capital Group Opened branch in NYC Acquired Datafaction Two FDIC, one branch deals in CA and NV Opened branches in Nashville and Atlanta FDIC deal in NV Acquired First American Equipment Finance Acquired Rochdale Investment Management

26 Why City National? 1. Track record of profitability 2. What we didn t do 3. Uniquely attractive clientele and focus 4. Exceptional deposit base 5. Growing loan portfolio 6. Strong, low-risk balance sheet 7. Excellent capabilities to drive long-term growth 8. Positioned for rising interest rates

27 Positioned for Rising Interest Rates City National stands to benefit as short-term rates rise Change in net interest income 1 (Gradual 400 basis point parallel increase) Loan Portfolio 2 (% of total balances) 40% 37.4% 38.1% 30% 23% 20% 21% 56% 10% 10.9% 9.6% 0% Stable Balance Sheet Dynamic Balance Sheet 3 Floating Rate Adjustable Fixed Year 1 Year 2 1. From base case, which assumes stable rates and stable balance sheet 2. Including FDIC-covered loans 3. Assumes loans (excluding FDIC-covered loans) increase 10% per year and deposits decline 7.5% per year compared to base case As of September 30, 2013

28 City National: Premier Private & Business Bank 1. Track record of profitability 2. What we didn t do 3. Uniquely attractive clientele and focus 4. Exceptional deposit base 5. Growing loan portfolio 6. Strong, low-risk balance sheet 7. Excellent capabilities to drive long-term growth 8. Positioned for rising interest rates

29 Forward-Looking Statements This presentation 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 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, including changes in consumer spending, borrowing and savings habits; (2) the impact on financial markets and the economy of the level of U.S. and European debt; (3) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Board of Governors of the Federal Reserve System; (4) continued delay in the pace of economic recovery and continued stagnant or decreasing employment levels; (5) the effect of the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the 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 are uncertain; (6) the impact of revised capital requirements under Basel III; (7) significant changes in applicable laws and regulations, including those concerning taxes, banking and securities; (8) volatility in the municipal bond market; (9) changes in the level of nonperforming assets, charge-offs, other real estate owned and provision expense; (10) 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; (11) changes in inflation, interest rates, and market liquidity which may impact interest margins and impact funding sources; (12) the company s ability to attract new employees and retain and motivate existing employees; (13) increased competition in the company s markets and our ability to increase market share and control expenses; (14) changes in the financial performance and/or condition of the company s customers, or changes in the performance or creditworthiness of our customers suppliers or other counterparties, which could lead to decreased loan utilization rates, delinquencies, or defaults and could negatively affect our customers ability to meet certain credit obligations; (15) a substantial and permanent loss of either client accounts and/or assets under management at the company s investment advisory affiliates or its wealth management division; (16) soundness of other financial institutions which could adversely affect the company; (17) protracted labor disputes in the company s markets; (18) the impact of natural disasters, terrorist activities or international hostilities on the operations of our business or the value of collateral; (19) the effect of acquisitions and integration of acquired businesses and de novo branching efforts; (20) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies; (21) the impact of cyber security attacks or other disruptions to the company s information systems and any resulting compromise of data or disruptions in service; and (22) the success of the company at managing the risks involved in the foregoing. For a more complete discussion of these risks and uncertainties, please refer to the company s Annual Report on Form 10-K for the year ended December 31, 2012.

30