2012 11 13 Cyn Bofa-ml Slides Final

8/11/2019 2012 11 13 Cyn Bofa-ml Slides Final

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Christopher J. Carey

Chief Financial Officer

Bank of America-Merrill Lynch Banking & Financial Services Conference

New York

November 13, 2012


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City National: Premier Private & Business Bank

Founded: 1954

Headquarters: Los Angeles

Assets: $26.3 billion

Market Cap: $2.7 billion

Offices: 78 (16 regional centers)

Colleagues: 3,400

AUM/A: $56.7 billion


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Why City National?

Track record of profitability

Uniquely attractive clientele

Exceptional deposit base

Growing loan portfolio

Strong, low-risk balance sheet

Excellent prospects for long-term growth


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A Track Record of Profitability

3Q2012 Change1

Net income $ 59.8 mil. 44 %

Earnings per share $ 1.10 43 %

Revenue $ 317.2 mil. 18 %

Net interest income $ 209.9 mil. 5 %

Average loans2 $ 13.6 bil. 15 %

Average core deposits $ 21.2 bil. 12 %

Noninterest income $ 107.3 mil. 54 %

Assets under mgmt/admin $ 56.7 bil. 17 %

Loan loss provision2 $ 2.0 mil. 73 %

Loan loss allowance2 1.96%

1. Percentage change from 3Q20112. Excluding FDIC-covered loans


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CLIENTS

Fortune 1000

Retail Customers

TOTAL ASSETS

Mega Banks > $100B

Community Banks < $5B

Uniquely Attractive Clientele

City National Bank $26.3B

Leveragingstrengths inkey markets

Businesses: $1M $250MIndividuals1: Assets > $1M

Income > $250K

1. City Nationals Preferred Banking initiative targets individuals with income of $150,000 or more and investableassets of $250,000 or more.


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Ranked #1 in Client Satisfaction by Greenwich Associates

Received 7 excellenceawards for business

banking National award for

international services

1st in client satisfactionamong all banks in

California in the smallbusiness segment


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Serving California the worlds 9thlargest economy

11 counties

27 million people

990,000 businesses

750,000 millionaire households

Plus Nevada, New York City,Nashville, and Atlanta


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1. New York et al, NY-NJ-PA 448,252

2. Los Angeles-Long Beach et al, CA 245,489

3. Chicago et al, IL-IN-WI 203,332

4. Washington et al, DC-VA-MD-WV 179,1965. Philadelphia et al, PA-NJ-DE-MD 141,891

8. San Francisco-Oakland et al, CA 121,229

11. Atlanta-Sandy Springs et al, GA 104,759

17. San Diego-Carlsbad et al, CA 67,352

18. Riverside et al, CA 66,947

22. San Jose-Sunnyvale et al, CA 50,044

30. Las Vegas-Paradise, NV 35,819

40. Nashville-Davidson et al, TN 30,232

Source: Phoenix Marketing International, AMS 20111. Core Based Statistical Area

Top 50 Metro Markets1(by Number of Millionaire Households)


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0

5

10

15

20

25

2008 2009 2010 2011 9M2012

Noninterest Bearing Other Interest Bearing

CDs > $100K

Exceptional Deposit Base

Low-cost core deposits equal 97% of total

$17.9

$inbillions

$19.3

$21.0

$11.9

$14.4

Average Deposits Average Deposit Growth1

By Business Line

1 Percentage growth for business lines only, excluding FAEF,2008 9M2012

Entertainment 36% Core 19%

CBS 17% PCS 13%

Treasury Mgmt. 12% Specialty Banking 3%


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0

5

10

15

3Q2011 4Q2011 1Q2012 2Q2012 3Q2012

Comme rcia l CRE Mortgage Re side ntial Mortgage

RE Const ruc tion E quity L ines Ins tall me nt

Growing Loan Portfolio

Loan balances increased for sixth straight quarter

$inbillions

1. Excluding FDIC-covered loans

Average Loans1

$12.2$11.8

$12.4$13.1

$13.6 Third consecutive

quarter of record loanproduction

C&I accounted for overhalf of 3Q12 loanproduction

Offset by $700 million innormal amortization andhigher pay-offs


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Growing Loan Portfolio

Specialty Banking 42% Real Estate 21%

Entertainment 19% Private Client Services 7%

Commercial Banking 6% Core Banking 5%

Loan growth driven by C&I lending

$4.9$5.2 $5.3

$5.8 $6.1

0

2

4

6

8

3Q2011 4Q2011 1Q2012 2Q2012 3Q2012

$inbillions

Average C&I Loans Average C&I Loan Growth1By Business Line

1 Percentage growth for business lines only, excluding FAEF andInternational Correspondent, 3Q11 3Q12


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$0.0

$7.5$5.0

$0.0 $1.0 $2.0

2.28 2.16 2.13 2.09 2.00 1.96

2Q11 3Q11 4Q11 1Q12 2Q12 3Q12

Provision ($mm) Allowance / Total loans

Strong Balance Sheet

NPAs and NCOs* Provision and Reserves*

* All totals and ratios exclude FDIC-covered assets

Asset quality remains very sound

$inmillions

1.54 1.56

1.16 1.11

0.98 0.95

(0.15)

0.36

0.18

(0.15)

(0.08)0.06

2Q11 3Q11 4Q11 1Q12 2Q12 3Q12

N PAs / Tot al l oans N CO s ( Net Reco ve rie s) / Av g. lo ans


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10-Year Average Net Charge-offs(by Portfolio)

* As of 9/30/12, excluding FDIC-covered assets** 10-year average 2002 September 2012 (annualized)

Net charge-offs average 0.39% over 10 years

$6.3

$2.5

$3.9

$0.2$0.7

$0.1

0.46 0.34 0.02

2.03

0.100.57

Commercial CRE Mortgage Residential

Mortgage

RE

Construction

Equity Lines Installment

Portfolio* 10-Year Ave. Net Charge-Offs**

$inbillions


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20.5%

9.3%

5.3% 5.0%

29.9%

18.0%

15.3%

11.3%

25.0%

14.6%

12.4%

6.1%

0%

10%

20%

30%

2009 2010 2011 3Q2012

CNB Peer Average Peer Median

Nonaccruals to Tier 1 plus ALLL

Peer Group: National banks with assets of $10-$30 billionSource: FIS

The company is well-capitalized


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Excellent Prospects for Long-Term Growth

City National stands to benefit when interest rates rise

8.5%

31.7%

0%

5%

10%

15%

20%

25%

30%

35%

Year 1 Year 2

Change in net interest income(400 basis points rate ramp up over 2 years)

60% of deposits areDDA

52% of loans arevariable rate (tied toprime or LIBOR)

Rates on 73% ofthese loans will

reset as soon asshort-term rates rise

Note: Assumes stable balance sheetAs of September 30, 2012


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Low Risk High Risk

Low Risk High Risk

Low Risk High Risk

Conservative Risk Profile

Proactively Managing Emerging Industry Risks

Regulatory Reform

- Strong capital compositionand ratios

- Durbin, Reg E and Reg Q

impact manageable- No direct derivatives exposure

Minimal Consumer Risk

- No mortgage put-back issues

- Pristine SFR mortgage portfolio

No Direct or IndirectExposure to PIIGS1

As of September 30, 2012

1. Portugal, Italy, Ireland, Greece and Spain


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Acquisitions to supplement organic growth


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Rochdale Investment Management

$4.9 billion in managed assets*

Modestly accretive in 2012

First American Equipment Finance

$340 million in assets*

Average yield of 6-7%

Modestly accretive in 2012

Plus:

4 FDIC-assisted bank acquisitions

San Jose banking office

Asset-based lending portfolio


At acquisition date


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Substantial wealth management business


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Substantial Wealth Management Business

A comprehensive wealth management platform

Bank andAffiliates

Ultra-High-Net-Worth

Institutional

Lee MunderCapital Group

- Institutional focus

- Acquired in 2009

- Merged withanotherinstitutionaladvisor

Investment

Management- City National

Asset Management

- Rochdale InvestmentManagement

- Investment affiliates

Brokerage Services

- City National

Securities Mutual Funds

- CNI Charter Funds

Business andPersonal Trust

RetirementServices

Convergent

Wealth Advisors- Serving ultra-high-

net-worthindividuals,families andinstitutions

- Open architectureplatform

- National business

International

MatthewsInternationalCapitalManagement

- Minority interest

- Top U.S. mutualfunds familyinvesting in Asia

- $19.0 bil. undermanagement


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Successful preferred banking strategy


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A Successful Preferred Banking Strategy

Meeting the financial needs of the affluent client segment

Client Value Proposition

Tailored banking, credit, andwealth management solutions

Preferred credit and depositrates

Complimentary ATM useworld-wide

Professionally managedand self-directedinvestment programs

Differentiated service

A dedicated in-branch

relationship manager

An exclusive toll-freecustomer service line

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2009* 2010 2011 Q3 2012

Loans Deposits

Brokerage Assets Managed Assets

Total New Money

$604*

$391

$929

$1,337

$inmillions

$1,435

$2,037

$2,471

$1,565

* 2009 investment balance data unavailable


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Additional banking offices


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Additional Banking Offices

New York

Pacific Palisades

Nashville


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International trade services


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Franchise finance

Legal and healthcare industries

Additional sales colleagues


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Additional Sales Colleagues

0

200

400

600

2006 2007 2008 2009 2010 2011 3Q2012

"New" - with CNB 2 years

Sales force grew 43% in six years

413 415

467443

498527

589

% of New Sales Colleagues

176 sales colleagueshired since 2006

71% of all salescolleagues are seasoned

Support growing branchbase and new initiatives


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Franchise finance

Legal and healthcare industries

Additional sales colleagues

New products, technology


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New Products, Technology


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Californias Economy: Turning the Corner

Creating jobs

Growing exports and imports

Investing in technology

Housing prices bottoming out


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No. 1 in Job Creation

Net Job Growth112-Month Change to September 2012 (000s)

Source: Bureau of Labor Statistics1. Nonfarm payroll, not seasonally adjusted

1. California 276.1

2. Texas 264.7

3. New York 135.24. Ohio 91.8

5. Florida 67.4

6. Indiana 63.8

7. Georgia 61.8

8. Arizona 57.1

9. Washington 56.7

10. Illinois 56.3


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Job Growth Across the Board

For many industries, the recovery is well underway

Source: California Employment Development Dept.

1. Not seasonally adjusted

-42.2

-9.0

11.3

14.4

22.5

25.1

25.4

25.7

34.2

42.5

44.0

67.5

-60.0 -40.0 -20.0 0.0 20.0 40.0 60.0 80.0

Government

Manufacturing

Finance & Insurance

Wholesale Trade

Educational Services

Retail Trade

Construction

Information

Healthcare & Social Assistance

Admin & Support Service

Prof'l, Scientific & Tech. Services

Leisure & Hospitality

12-Month Change to September 2012 (000s)1


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Why City National?

Track record of profitability

Uniquely attractive clientele

Exceptional deposit base

Growing loan portfolio

Strong, low-risk balance sheet

Excellent prospects for long-term growth


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Forward-Looking Statements

This news release contains forward-looking statements about the company, for which the company claims the protection of the safeharbor provisions contained in the Private Securities Litigation Reform Act of 1995.

A number of factors, many of which are beyond the companys ability to control or predict, could cause future results to differmaterially 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 itscustomers, including changes in consumer spending, borrowing and savings habits; (2) the impact on financial markets and theeconomy 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 Federal Reserve Board; (4) continued delay in the pace of economic recovery and continuedstagnant or decreasing employment levels; (5) the effect of the enactment of the Dodd-Frank Wall Street Reform and ConsumerProtection Act of 2010 and the rules and regulations to be promulgated by supervisory and oversight agencies implementing the newlegislation, taking into account that the precise timing, extent and nature of such rules and regulations and the impact on the companyis 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 ofnonperforming assets, charge-offs, other real estate owned and provision expense; (10) incorrect assumptions in the value of theloans acquired in FDIC-assisted acquisitions resulting in greater than anticipated losses in the acquired loan portfolios exceeding thelosses covered by the loss-sharing agreements with the FDIC; (11) changes in inflation, interest rates, and market liquidity which mayimpact interest margins and impact funding sources; (12) adequacy of the companys enterprise risk management framework; (13)the companys ability to attract new employees and retain and motivate existing employees; (14) increased competition in thecompanys markets and our ability to increase market share and control expenses; (15) changes in the financial performance and/orcondition of the companys borrowers, including adverse impact on loan utilization rates, delinquencies, defaults and customers abilityto meet certain credit obligations, changes in customers suppliers, and other counterparties performance and creditworthiness; (16) asubstantial and permanent loss of either client accounts and/or assets under management at the companys investment advisoryaffiliates or its wealth management division; (17) soundness of other financial institutions which could adversely affect the company;

(18) protracted labor disputes in the companys markets; (19) the impact of natural disasters, terrorist activities or internationalhostilities on the operations of our business or the value of collateral; (20) the effect of acquisitions and integration of acquiredbusinesses and de novo branching efforts; (21) changes in accounting policies or procedures as may be required by the FinancialAccounting Standards Board or regulatory agencies; (22) the impact of cyber security attacks or other disruptions to the companysinformation systems and any resulting compromise of data or disruptions in service, and (23) the success of the company at managingthe 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-lookingstatements 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, please refer to the companys Annual Report on Form 10-K for theyear ended December 31, 2011 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2012.


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2012 11 13 Cyn Bofa-ml Slides Final

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