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City National (NYSE:CYN)

Q1 2013 Earnings Call

April 18, 2013 5:00 pm ET

Executives

Cary Walker - Senior Vice President of Investor Relations

Russell D. Goldsmith - Chief Executive Officer, President, Director, Member of Special Matters Committee, Chairman of City National Bank and Chief Executive Officer of City National Bank

Christopher J. Carey - Chief Financial Officer, Executive Vice President, Chief Financial Officer of City National Bank and Executive Vice President of City National Bank

Analysts

Steven A. Alexopoulos - JP Morgan Chase & Co, Research Division

John G. Pancari - Evercore Partners Inc., Research Division

Aaron James Deer - Sandler O'Neill + Partners, L.P., Research Division

Joe Morford - RBC Capital Markets, LLC, Research Division

Gary P. Tenner - D.A. Davidson & Co., Research Division

Brett D. Rabatin - Sterne Agee & Leach Inc., Research Division

Jennifer H. Demba - SunTrust Robinson Humphrey, Inc., Research Division

Gaston F. Ceron - Morningstar Inc., Research Division

Herman Chan - Wells Fargo Securities, LLC, Research Division

Operator

Good afternoon. I would like to welcome everyone to this discussion of City National Corporation's First Quarter 2013 Financial Results. My name is Stephanie, and I will be your coordinator for today. [Operator Instructions] This call is being recorded and will be available shortly after it's completed on City National's website at cnb.com.

Now I will turn this call over to Cary Walker, Senior Vice President and Manager of Corporate Communications for City National. Please proceed.

Cary Walker

Thank you, and good afternoon. Here to discuss City National's first quarter 2013 highlights are Russell Goldsmith, our President and Chief Executive Officer; and Chris Carey, our Chief Financial Officer.

This call will include comments and forward-looking statements based on current plans, expectations, events and industry trends that may affect the company's future operating results and financial position. These statements involve risks and uncertainties and future activities and results may differ materially from these expectations. The speakers on this call claim the protection of the Safe Harbor provisions contained in the Securities Litigation Reform Act of 1995. For a more complete discussion of the risks and uncertainties that may cause actual results to differ materially from expected results, see the company's annual report on Form 10-K for the year ended December 31, 2012.

This afternoon, City National issued a news release outlining its first quarter 2013 financial results. To get a copy, please visit our website at cnb.com. After comments by management today, we will be open to -- we'll open this call to your questions.

Now I'll turn it over to our CEO, Russell Goldsmith.

Russell D. Goldsmith

Good afternoon, and thank you all for joining us again. As you know, City National just reported its financial results for the first quarter of 2013. Net income grew 11% to more than $51 million. Loans, deposits and assets under management all increased to double-digit rates from 1 year ago. Credit quality was strong and improving. Expenses were very contained, in fact, they declined, if you exclude the 2 acquisitions we made in 2012. And at the same time, we continue to invest in the company's future growth with the addition of a number of talented new colleagues, innovative products, state-of-the-art technology and 5 new banking offices that will open through the course of this year. Once again, City National posted strong results despite this slow-growing economy, with its exceptionally low interest rates pressuring asset yields and, typically for us in the first quarter, a modest seasonal reduction in deposits, as well as the continuing and expected decline in covered assets from our FDIC bank acquisitions that we've been telling you about for quite some time.

I'm very pleased to report that with these results in the first quarter, City National has now been profitable in every single quarter of the past 20 consecutive years and, in turn, we're off to a good start for the new year. In a few moments, Chris and I will take any questions but first, let me cover a few of the first quarter's highlights.

Let's start with loan growth. New loan production reached $990 million in the first quarter. Overall, net balances grew nearly $400 million, which is about 3% from year end, to a record high of loans at City National of more than $15 billion. That's all the more remarkable when you consider that about $200 million in loans that were kind of a year-end transactions of one sort or another, that they all paid off, as anticipated, in January. Loan growth was really broad-based. A little over half of it came from C&I lending and our specialty banking unit led the way on that. Line utilization edged up just a hair for the third straight quarter, but once again, about half the growth in new loans came from new clients, which we're particularly pleased to see, and that growth really came across the board with all of our divisions contributing. Commercial real estate and residential mortgage lending also grew solidly.

Credit quality remained exceptionally strong and even improved. In the first quarter, net recoveries totaled $4.8 million, which is more than double the $2 million total in the fourth quarter of last year. Nonperforming assets fell more than $17 million and are under 1%. Classified loans continued to decline, and they are now well below 3%. City National did not take a provision in the first quarter, though we still expect as loans grow through the year that we may need some provisioning. The company remains well-reserved at 186 basis points of our total loan portfolio.

Average deposits grew by double-digits as well, up 11% year-over-year, and core deposits were actually up 12%. At quarter end, total deposits were $23 billion. The linked-quarter decline that you see, fourth quarter to first quarter, as most of you know since most of you follow our company, this is a seasonal pattern that has been going on here for many, many years, and you know that our deposit balances tend to run up a bit at year end and then, subside modestly in the first quarter. That's what we've experienced again this year. As far as we can tell, the TAG program's expiration has had little impact on our deposit base.

I think it's worth noting that it would be easier for us to grow earnings at a higher rate if we were eliminating a bunch of jobs or postponing investments in our company or reversing some of our total -- totals in our loan loss reserve. But that is not what City National is doing. We're committed to creating long-term value for our shareholders, providing our clients with the best in banking and Wealth Management and expanding our business as we always have been. So we continue to invest strategically in new growth opportunities, not only through acquisitions but also by adding talented new colleagues, opening this year 5 new banking offices, introducing new products and new technology and increasing our marketing activity, even as we find places in our expense base where we can trim costs and manage expenses.

Let me give you a little color on what sort of investments we are making in 2013, but first, with regard to our 2 acquisitions in 2012, Rochdale Investment Management and First American Equipment Finance, we're very pleased at the progress those 2 businesses are making with us. In the first quarter of this year, Rochdale combined certain key operations with those of City National Asset Management as they move toward the creation of a new $19 billion Asset Management firm, City National Rochdale. The combined company will provide better research expertise and investment advice than either company was able to offer on its own. It will combine City National's focus on its bank clients with Rochdale's national focus. We expect full integration of the merged company by the end of this second quarter, and we've already reached an important milestone by merging their 2 mutual fund families into 1 stronger, much more efficient fund family.

Last month, we combined the bank's pre-existing equipment leasing assets with those we acquired from First American. That business is run by First American's outstanding CEO, Bill Verhelle, and it offers our improved equipment leasing capabilities to companies nationwide, as well as to City National's bank clients. In addition to strengthening our leasing and Wealth Management capabilities, City National is getting ready to add 5 new banking offices, the first of our next-generation branches, actually, and we're doing this in what we view as important strategic locations and dynamic economies.

We've been in New York City for, 10 years succeeding with strictly organic growth, and later this year, we're going to expand what is basically a $2 billion bank by opening 2 ground-floor offices in Manhattan, our first 2 branches in the city, 1 on Park in our headquarters building and another on Sixth near Broadway. I hope many of you have actually seen our very bold signage. In any case, the new offices and the signage are already enhancing City National's brand recognition in New York City.

Later this year, we're going to add 2 more banking offices in the San Francisco Bay Area, which by the way, by itself is today the 19th largest economy in the world, and that will bring our total number of offices to 12. We're also going to relocate and substantially upgrade our office and expand it in Palo Alto as a part of our expansion of our technology banking business.

Meanwhile, we're investing in a range of new products and new technology to better serve our clients and to make our colleagues more productive. One example of our company's improving technology is City National Online, our new personal portal that gives people, our clients, the ability to see all of their personal banking and investment accounts with us at one time in one place with state-of-the-art technology. We are also seeing tremendous adoption of City National's mobile banking apps. In just under, well, I guess, it's been just 1 year almost to the day, we've had 10,000 clients sign up for these apps and use our product there. A few weeks ago, we introduced a new payment tool called Book2Bank that will allow small business owners to more easily integrate their bank accounts with their QuickBooks software, another good example of how we design capabilities to match the needs of our clients.

Of course, City National's business, like all banks, is affected by the economy, so let me close with a few comments on how the economy looks to us at this point. There's no question that the U.S. economy is in much better shape today than it has been during the past 5 years. Most experts that we talked to were forecasting GDP growth this year of between 2% and 3%. National unemployment is under 8% and the private sector is clearly creating jobs. The economy in California is continuing to see positive signs of recovery. The state's fiscal situation is on much firmer ground and it even has a projected budget surplus. California added more jobs than any other state last year and added over 40,000 jobs in February, bringing its unemployment rate down to 9.6%. Obviously, both on the national and state-level, those levels are too high, but things are moving in the right direction, albeit slowly. Hiring has definitely picked up, especially in technology, some in entertainment business and professional services, manufacturing and certainly, construction is seeing some improvement. You can certainly deduce that from looking at the recovery in the housing market. The median home price in California of $334,000 is up 24% from a year ago, and inventories are down almost 40%. The sales of homes priced above $500,000 remain strong, with pricing up nearly 31% from a year ago. Much of the growth is in the state's more expensive coastal regions like Orange County and the San Francisco Bay Area, where we have -- most of our offices are in the coastal regions of California. And you can see, we've expanded in Orange County, and we're expanding even further in the Bay Area. Just yesterday DataQuick announced that the median Southern California home price in March actually increased 23% from a year earlier. That makes it the eighth consecutive double-digit increase, and the median price in Southern California -- and that includes hard-hit areas like the Inland Empire. The median price is now higher than it's been since July of 2008, quite a recovery. Sales of homes priced at more than $800,000 are up 33%, and that would be more reflective of what you'd see in our residential mortgage portfolio.

Looking to the rest of 2013, we are moderately optimistic at this point. Very low interest rates and the run-off of higher-yielding FDIC covered loans will, as we've said repeatedly, put pressure on our net interest margin. But loan production is encouraging. Credit quality is quite strong. Our recent acquisitions and, in fact, our entire organization are performing quite well, and you can see that as we attract new, quality clients and gather new loans. As a result, City National continues to generate a nice diversified mix of revenue and, in fact, grow revenue and grow earnings.

For more insights into all of that, let me turn to our dynamic Chief Financial Officer, Chris Carey.

Christopher J. Carey

Thanks, Russell. Good afternoon, all. As Russell said, the company is off to a very good start in 2013. Looking at the underlying fundamentals, we had very solid loan and deposit activity and good expense management. Somewhat seasonally, noninterest income was impacted on a link-quarter basis with lower swap income down $2.5 million and international service income down from a very strong fourth quarter, $1.7 million. We would expect these 2 areas to pick up somewhat going forward. Other variable income related to covered loans was also lower in the quarter. And lastly, the preferred stock we issued in the fourth quarter of 2012 had a $0.04 a share impact in the first quarter, and it looked like to me that about 1/3 of the bank analysts that cover us didn't include this impact in their forecast of Q1 for us.

So now let me say a few words about margin, fee income, expenses. Looking at the margin, at Q1 quarter end, it stood at 321 basis points, down slightly from the fourth quarter. The decline was primarily due to lower income from cover loans that were repaid or charged off and a lower base yield due to the expected runoff of covered loans. Net interest income in the first quarter was flat compared with the same period last year and slightly down compared to the fourth quarter, but that was also due to 2 fewer days in the first quarter, lower loan fees and continued pressure on loan yields. We expect margin compression, not severe, but margin compression to continue as long as rates stay where they are today. But when they rise, and they eventually will, we expect significant gains.

Looking at fee income. Fee income for trust and investment services grew from the fourth quarter as we continue to get a lift from Rochdale and price appreciation in the equity markets. Cash management also had a strong quarter. These increases were more than offset by higher FDIC loss sharing expense, lower distribution income from investments, which is a little more one-time to us which occurred in the fourth quarter, and fewer client swap transactions. International service fees also came off the strong quarter, as I mentioned.

Now looking at expenses. The bottom line is they remained under control. In fact, excluding the acquisitions of Rochdale and First American, noninterest expense actually fell 2%. We were helped by a significant decline in REO expenses. Additionally, as many of you know, we have been cutting expenses in some areas while continuing to invest in numerous other areas and new initiatives. Expenses went down 5% from the fourth quarter, thanks in part to lower legal fees and REO expense. You'll also recall that fourth quarter noninterest expense included a $4.7 million charge related to the resolution of the legal claim. Although staff-related expenses were up $4.4 million, this was entirely due to seasonally higher employer taxes, mostly FICA, which increased $5.6 million.

So in conclusion, overall, it was a very solid start to the year. Loan growth continued at a good clip, particularly after the very strong fourth quarter we had. We were very happy with what we saw in the first quarter. Credit quality was very strong, and we continue to invest and expand. It's tough to grow net interest income in today's rate environment. When things get back to normal, we're confident City National will outperform in this area. In the meanwhile, we continue to expand and improve our capabilities.

Now Russell and I will be happy to take your questions.

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from the line of Steven Alexopoulos with JPMorgan.

Steven A. Alexopoulos - JP Morgan Chase & Co, Research Division

My first question, many West Coast banks are talking about competition for C&I getting worse, not only on the price side but now also on the structure side. And given you continue to see good growth in C&I and bring on new customers, one, how aggressive are you needing to get to win the business? And two, do you also see competition getting close to a point where you may need to pass on some opportunities?

Russell D. Goldsmith

Steve, there is fierce competition for loans, but I've been saying that for several years. You hear a lot of people talk about why aren't banks making more loans, but our experience and the experience of hundreds of bankers in our company is that whenever we've come across a creditworthy borrower who is looking to change banks, I don't think we've experienced a situation in years where there aren't more banks competing for that loan. So competition is fierce but it has been for a number of years. I think that we're seeing pressure on pricing and that's reflected in the, in part, on what you're seeing in net interest margins across the industry. Some pressure on structure but I think more we're seeing pressure on pricing. And as City National did in '06 and '07, we are very competitive to a point and if we think that something is really structured poorly or priced inappropriately, we'll be aggressive and competitive, but we'll stop at that point.

Steven A. Alexopoulos - JP Morgan Chase & Co, Research Division

And maybe just one follow-up. Given how strong the real estate market is in San Fran and L.A., why are you not seeing stronger growth in the jumbo mortgage market?

Christopher J. Carey

Steve, I would say, we are seeing strong growth. There is still a lot of churn in that business, though. And we try to price competitively. There are some people that we think are virtually giving the business away and when we look at it, we think they're generating ROEs in the 20 and 30 basis points and that's -- we're not going to go that low, so it's a highly competitive market. And our -- the activity we have there is very high but there's still, unfortunately, there's a fair amount of churn in there, too.

Operator

Your next question comes from the line of John Pancari with Evercore Partners.

John G. Pancari - Evercore Partners Inc., Research Division

Can you give us a little more color on the magnitude of the incremental margin compression you expect going forward here, or at least over the next couple of quarters? Is it fair to assume that we can see a similar mid-single-digit level of compression like we saw this quarter?

Christopher J. Carey

I think that's a tolerable range. I mean, the only thing I would say is that it depends what happens with our balance sheet, which we're never 100% sure. But assuming things progress the way we'd expect, I think it's in that kind of range.

John G. Pancari - Evercore Partners Inc., Research Division

Okay. And then, Chris, in terms of the ability to protect spread revenue, yes, we did see a decline in NII this quarter, partly day count, but you also highlighted rates that impact spread rev. Can you talk about your ability to grow through that margin compression and still put up some pretty good growth in spread revenue on a quarterly basis over the remainder of the year?

Christopher J. Carey

Well, I mean, first of all, we don't want to -- we don't do a specific annual forecast so we're going to stay shy of it, clearly. We've said that, I mean, there's going to be pressure on the margin and it's hard to grow net interest income, where that's our goal overall, growing net interest income. We don't focus on the margin percentage as much, but our overall outlook is still very modest. Net income growth, so I think that's about as much as we can say at this point.

Russell D. Goldsmith

Just as a reminder, and we mentioned it in our remarks, but part of what's compressing margin is this steady and expected outflow of covered loans, which are roughly double the margin of what probably a typical loan would be for us.

Operator

Your next question comes from the line of Aaron Deer with Sandler O'Neill & Partners.

Aaron James Deer - Sandler O'Neill + Partners, L.P., Research Division

You sound fairly optimistic about the outlook for loan growth given the economic improvement. I'm just wondering if you could give us a sense of how the pipeline was building during the quarter, and -- or maybe where the pipeline stood at currently versus where it was at the beginning of the year.

Russell D. Goldsmith

Aaron, it's a good question, but I've learned from experience that pipelines are kind of like counting your chickens before they're hatched. Our bankers' pipelines generally look good but it's not a perfect indicator of what's ahead.

Aaron James Deer - Sandler O'Neill + Partners, L.P., Research Division

Okay. And then, I guess, last year there was -- there were a number of deals for finance companies including your acquisition of First American. This year, it seems like some of that activity has slowed down and I'm wondering if there's still opportunities out there or if there have been opportunities, they have just been bid up too high, or kind of what's your outlook for those sorts of deals and do you have an interest in doing more on that front?

Russell D. Goldsmith

Well, we're very pleased with the First American acquisition. As I said, it gave us greater capabilities for our existing client base, gave us a national client base and a terrific team of people in Rochester, New York. We like that business and certainly would be interested in businesses that are like that or that might bolt on to that. Sitting with the kind of substantial, very low cost deposit base that we have, we can really add value if we find ways to make more loans, obviously, and First American gave us a definite shot in the arm in that regard. We've done a number of things organically. I think you know we've just added a new mortgage warehouse lending team. They're starting to put some things in their pipeline, speaking of pipelines. So City National has a long-standing attitude, as I think you know, of kind of looking at opportunities that as we like to say meet our test of fit, focus and price. I think the pricing on some of the things that are out there continue to be unrealistic, and we continue to be very selective about what we think fits with us and shares our focuses of premier private and business bank. But there's no question that we'd like to find additional entities that would fit in well with City National and would take advantage of our low-cost deposit base. So we continue to look, happy to answer calls from Sandler O'Neill when you guys have a good idea, and we'll see.

Operator

Your next question comes from the line of Joe Morford with RBC Capital Markets.

Joe Morford - RBC Capital Markets, LLC, Research Division

I guess I was wanting to go into the loan growth a bit more. I mean, unlike most banks that saw strong growth in the fourth quarter with the pull-forward of demand, you all actually continue to post steady growth here in the first quarter in what's seasonally a softer quarter and it's been pretty broad-based. And just kind of -- you touched on some of this, but what's driving a lot of this? I mean, is it the fact that you hired a lot of new bankers last year who are now bringing in some of their new customers? Is it more your niche focus and I don't know, just trying to understand why maybe a little different here than what we've seen with most other banks so far?

Russell D. Goldsmith

Well, I think to some degree, we're seeing growth with new clients and new loans across the board to varying degrees. As I mentioned, I think our specialty banking unit, which has things in it like franchise, finance, asset-based lending, as well as our operations in New York in our entertainment division, those have been particularly strong. But our private bank and our real estate teams have also been seeing some growth, and our outreach to small business through our branch system, which we've been ramping up, as we you know, over the last few years. So we're pleased. It's not -- and obviously, the year-over-year numbers, First American is a factor there since we didn't own First American in the first quarter of last year. I'm sure you factor that into it. So really, we're kind of hitting on all cylinders, a little stronger in some areas as I've suggested, but we've got a great team of bankers here. And the new people that we've added, like the team in franchise finance, like our ABL folks, they're contributing but so was our existing or pre-existing team.

Joe Morford - RBC Capital Markets, LLC, Research Division

And just following up on that, how did the balances at First American compare now with when you bought them? How much growth has there been?

Christopher J. Carey

They're roughly up around 10%.

Operator

Your next question comes from the line of Gary Tenner with D.A. Davidson.

Gary P. Tenner - D.A. Davidson & Co., Research Division

Just had a question regarding balance sheet management. Looks like the securities portfolio from year-end levels declined quite a bit. Anything behind that or is that just the seasonality -- or is that just reflecting the seasonality within the loan growth [indiscernible]?

Christopher J. Carey

It's really just reflecting the seasonality in the loan growth. That's all.

Operator

Your next question comes from the line of Brett Rabatin with Sterne Agee.

Brett D. Rabatin - Sterne Agee & Leach Inc., Research Division

I wanted to just follow-up on Joe's question a little bit and see if maybe you had a line utilization factor for the first quarter versus 4Q, and then, I was also just curious if the technology guys you added were any driver for some of the growth in 1Q or maybe the mortgage warehouse people as well?

Christopher J. Carey

So the line utilization, really, is up like 0.2%, so essentially, no change -- no material change in terms of outstandings. And the technology guys were off to great start, I know they've got a bunch of deals done, it wasn't that material.

Russell D. Goldsmith

Nothing in the -- nothing in the first quarter numbers would have come from the tech team, although they're getting a great positive reception. We're very pleased about the start. And the mortgage warehouse team, nothing has hit the books yet, although as I mentioned, they're starting to develop a nice pipeline.

Brett D. Rabatin - Sterne Agee & Leach Inc., Research Division

Okay, so those 2 things are still things to come?

Russell D. Goldsmith

Absolutely.

Operator

Your next question comes from the line of Jennifer Demba with SunTrust Robinson Humphrey.

Jennifer H. Demba - SunTrust Robinson Humphrey, Inc., Research Division

Just got my question.

Operator

Your next question comes from the line of Gaston Ceron with Morningstar.

Gaston F. Ceron - Morningstar Inc., Research Division

Morningstar Equity Research. Just wanted to -- I wonder if you could go back to the issue of loan growth and loan demand. And as -- I know you talked about this a little bit already, but as you kind of survey loan demand across your markets, what kind of projects are your clients looking to have financed? Just trying to see what kind of confidence in the economy are you seeing from your clients. You said that -- it sounded like you were relatively upbeat and the economic fundamentals are kind of continuing to gradually improve, but I'm curious how that's reflected in the, again, the kind of projects that your clients are coming to you for loans.

Russell D. Goldsmith

I think it's -- you're seeing a range of activity. Obviously, we've touched on various pieces in no particular order. Residential activity continues to be fairly robust, more of refinancing but a significant percentage of purchases going on. You're seeing owner-occupied real estate as an area where people are taking advantage of these very low rates and financing their businesses' headquarters or warehouse or whatever it is. You're starting to see some pickup in construction. We have a little uptick there with some multifamily infill construction. So I think as I touched on the franchisee finance area, certainly, we're seeing some of the larger players that bank with us historically over the last few years. You've seen larger companies be more optimistic and more aggressive about borrowing, so you've seen our syndicated and Shared National Credits as an area, many of those are actually relationships that we have, but they're larger loans that we share with other banks. So I think if you're asking about what's the mood out there, I think there's still caution. There's a lot of uncertainty that exists in the world, whether it's tragic events like we've seen this week or the continuing uncertainties and even threats to economic growth that come out of Washington: changing tax rates, changing tax policies, uncertainty about deficits and refinancing, the negative impact on the economy from the sequester. All those things plus the sharp memories of '08 and '09 in the minds of entrepreneurs, I think that continues to hold this economy back. And so the growth rate, 2%, 2.5% growth rate that looks like it's out there for 2013, reflects, in part, that caution. So I think we're seeing people stepping up a little bit more, but our line utilization is up from where it was a year ago or 2 years ago, but it's not like it's got any significant momentum at this point.

Christopher J. Carey

And I would just add, just so people don't misinterpret it. In this quarter, for example, our production number of $990 million, a little over 10% was syndicated. So while there's activity there, I mean, it's still relatively a small amount of what we're doing.

Operator

[Operator Instructions] Your next question comes from the line of Herman Chan with Wells Fargo Securities.

Herman Chan - Wells Fargo Securities, LLC, Research Division

More color on the construction balances, which did some growth after the prolonged runoff. What's the outlook there? And are we at the point where we should see some growth on that front? And is the growth more multifamily focused, which I believe also you articulated earlier?

Russell D. Goldsmith

We saw in this quarter, I mean, that a couple of nice infill multifamily projects and obviously, we've been seeing some of that because as you know, multifamily has been very strong. We're not projecting a significant increase in construction financing this year for some of the reasons I just said. I think there's caution, not a lot of speculative building. But as you get around California and even a little bit in Nevada, you're seeing construction happening and so carefully, we'll pick up some additional business there. But we don't like construction to get to be too significant in our portfolio.

Herman Chan - Wells Fargo Securities, LLC, Research Division

Understood. And on the decline in DDA balances, would it fair to say that most of the decline were related to typical seasonal patterns? And did you see any chunk of the outflow move into the Wealth Management complex?

Russell D. Goldsmith

We have seen growth in Wealth Management, but I do think the bulk of it in the first quarter, like we've seen in the first quarter for decades at City National, is a seasonal movement as people deal with taxes and bonuses and distributions and things of that sort.

Operator

At this time, there are no more questions in the audio queue. So I'd like to turn the call back over to Mr. Goldsmith.

Russell D. Goldsmith

Well, that's great. I want to thank all of you for joining our call today. Chris and I appreciate your continuing interest in City National. We look forward to talking with all of you again at the end of the second quarter, and hope you have a good evening. Thanks, again, for joining us.

Operator

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect.

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