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City National Corporation (NYSE:CYN)

Q3 2012 Earnings Conference Call

October 18, 2012, 05:00 p.m.ET

Executives

Cary Walker -- SVP and Manager of Corporate Communications

Russell Goldsmith -- President and CEO

Chris Carey -- CFO

Analysts

Steven Alexopoulos – JPMorgan

Aaron Deer -- Sandler O'Neill

Jennifer Demba -- SunTrust Robinson

Joe Morford -- RBC

John Pancari -- Evercore Partners

Brett Rabatin -- Sterne, Agee

Brian Zabora -- Stifel Nicolaus

Casey Haire -- Jefferies

Operator

Good afternoon. I would like to welcome everyone to this discussion of City National Corporation's third quarter 2012 financial results. My name is Hope and I will be your coordinator for today. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question-and-answer period for analysts and investors. (Operator Instructions). This call is being recorded and will be available shortly after it is completed on City National's website at cnb.com.

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

Cary Walker

Thank you. Good afternoon. Here to discuss City National's third quarter 2012 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 financial 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, 2011.

This afternoon, City National issued a news release outlining its third quarter 2012 financial results. To obtain a copy, please visit our website at cnb.com. After comments made by management today, we'll open up this call to your questions.

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

Russell Goldsmith

Good afternoon. Thank you all for joining us today. This afternoon, City National was pleased to announce third quarter net income of $59.8 million, a very strong 44% increase from the third quarter of 2011 that came to $1.10 per share. Even though today's low interest rates present a challenge for City National and all banks, we're quite pleased with the growth and results here in City National, both for this quarter and year-to-date.

For the nine months so far in 2012, net income is $160.8 million which is a 25% increase from the same period last year. This third quarter was particularity good across the board. Loans, deposits and revenue all grew with double digit rates and reached record highs. For the very first time, City National's assets topped $26 billion. Credit quality remains solid and the Company continued both to invest in new products and services in people and acquisitions, while at the same time holding expenses in check.

Our third quarter earnings, of course, included a couple of variable items and we'll discuss them later in the call. But as you can see, City National's business is strong and well positioned for continued long-term growth. We continue to add clients to grow assets, to enhance our capabilities and to expand in our very attractive geographical footprint. All-in-all, despite the low interest rates and a still tepid economy, we're pleased that City National is nearing its 20th consecutive year of profitability and the fact that the Company has managed to be profitable in every quarter during those nearly 20 years. Clearly that stability has contributed to City National's enhanced reputation and market share.

I'll go into some of the highlights of the quarter and then turn things over to Chris Carey for more debt and color. Let's start with loan growth. I'm pleased to report that loan balances increased for the sixth straight quarter and for the third quarter in a row, we posted record loan production. Loan originations came to $920 million, bringing our year-to-date total to $2.6 billion. About half of the year-to-date growth came from new clients which we're particularly pleased about. Once again, we made good gains in C&I lending which accounted for well over half of our third quarter loan production.

The new teams that we've added in the past year in franchise finance and asset-based lending contributed to that growth as did our latest acquisition, our second quarter acquisition of First American Equipment Finance which also performed well and contributed nicely to that year-over-year growth. Commercial real estate loans also grew in the quarter and residential lending went up slightly, notwithstanding that we saw a record refinancing activity in the quarter.

Overall line utilization remains as relatively low levels. Loan commitments were up about $200 million to $13.6 billion, but outstandings were at $7.9 billion, an increase, but still leaving a lot of room for further draw-downs as the economy picks up. New loan production, however, was offset by about $700 million in normal loan amortization and early payoffs.

As is happening throughout the United States, we continue to see many entrepreneurs and investors sitting on the sidelines, conserving their cash, staying cautious in light of the economic and political uncertainties that are out there today. But at some point, utilization rates will rise to more normal levels as the economy and confidence improve and we expect our clients will be borrowing to expand and grow their businesses more robustly when that happens. And when it does, City National will benefit.

Credit quality in the third quarter remains solid. Nonperforming assets declined for the fourth straight quarter. In our $13.7 billion loan portfolio, not including covered loans, net charge-offs totaled just over $2 million and we took a loan loss provision equal to that amount. City National remains very well reserved now at 1.96% of total loans.

On the deposit side, City National continued to see remarkable growth in the third quarter. The Company's deposit balances grew by $1.4 billion. Importantly, almost 90% of that dramatic third quarter increase in deposits was in noninterest-bearing deposits. In just the past four years, it's worth noting that City National has more than doubled the size of its stable, low cost core deposit base from $10.5 billion to $21.2 billion.

That remarkable growth reflects a number of things, including clients as I said sitting on the sidelines with their cash in a demand-deposit account. It reflects very low interest rates. It demonstrates the confidence that clients have in the safety and soundness of City National Bank. It also reflects the bank acquisitions we've made over the past few years and the success that we had in adding new high quality client relationships.

Turning to trust and investment fee revenue and income from brokerage and mutual fund fees, those grew significantly from last year thanks both to our acquisition of Rochdale Investment Management which closed on July 2 of this quarter as well as an improved performance from parts of our wealth management business.

Now let me turn to economic conditions as we see them. Despite the levels of uncertainty caused by factors everybody on this call is well aware of, including a situation in Europe and most particularity the fiscal cliff complexities that have left a lot of people wondering where tax rates and fiscal policy will be, I think when you look past that a number of thing are actually getting better in the economy.

Consumer confidence and retail spending are on the rise. Key US industries like technology, entertainment and healthcare are growing. It's remarkable that autos sales are now running in North America at almost – in the United States at almost 15 million units a year, up from 10.5 million units at the bottom of this economic period and according to numbers released just yesterday, housing starts nationwide were up 15% from August, faster growth then we've seen in that sector in four years. Home prices for the most part are also rising.

While private sector employment is making slow progress, it is making progress and we all saw the employment rate drop below 8% for the first time since January of 2009. I actually think that this fiscal complexity will get resolved probably in the first quarter of next year and that will bring some certainty and spur economic growth, perhaps a little faster than many are predicting.

Turning to California where 68 of our 70 branches are located, the state's unemployment rate fell to 10.6% in August as the state added jobs for the 13th month in a row. Year-to-date California payrolls have grown by nearly 300,000 people which is more than any other state in the nation and is a very substantial part of job growth for the whole country.

It's also worth nothing that City National is located in 11 counties, essentially close to the coast and the employment picture is brighter in those counties, generally speaking than the rest of the state. Obviously, the technology industry is doing very well up and down the state as are entertainment, tourism, healthcare and agriculture. Even the construction industry is adding jobs again.

Among the most encouraging news is the California's housing market continues to be on the mend. August marked the state's fifth straight month of year-over-year sales gains and the median home price reached a four-year high. Home prices in the sixth Southern California counties where we do business jumped 11% from a year earlier to $309,000. While values in the nine counties in the San Francisco bay area, most of which we have offices in, those gained 11% to $410,000.

And in this morning's newspaper here in Los Angeles, it was reported that the inventory of lower priced homes in California has fallen to levels not seen since 2007, a very encouraging sign. The State of California's finances are still a problem to say nothing of our ballet initiatives, but economic growth is actually producing higher than expected tax revenues and that's improving the state's position.

Heading into 2013, I think the economic outlook for California is good. Economists at UCLA predict that the state economy will actually grow faster than the American economy as a whole next year.

Looking at Nevada conditions there are slowly improving as well, just about 2% of our bankers based in Nevada but it's worth noting that unemployment there has seen some improvement with private sector jobs up about 12,800 through the first eight months of the year.

Residential building permits and housing starts in July increased nearly a third from the same period last year, tourism and gaming are up. Southern Nevada in particular has benefited for more than two years of rebounding visitor volumes in the regions hospitality and gaming industry has added almost 20,000 jobs.

As many of you know, the economy in New York continues to be strong and our two offices there continue to perform quite well. Next year, we plan to open two new – our first ever street level branches in Manhattan and we believe that will further strengthen our brand recognition and our growth in New York City.

For those of you on the call who are actually in Manhattan, you can see our dramatic new temporary signage in one of these new locations at 44th and 6th if you're interested. We also planned next year to open two more offices in the San Francisco bay area, bringing our total in that dynamic region up to 13 offices from just eight offices just three years ago.

While we intend to open four new branches next year, City National is actually investing as it has for many years now, is actually investing more money in its technology than in its bricks and mortar. Personal Mobile Banking, which we just launched in April of this year, is off to a very fast start. Its adoption by our clients has exceeded our most robust forecast.

Next month we will introduce its companion, our Mobile Banking for Business Clients. We've also introduced City National Online which makes it possible for our personal banking clients to view both their banking and their investment accounts in one place at any time online, and Datafaction a company that we bought just about two years ago has just launched its new state of the art cash management technology.

All-in-all, City National is in good shape and continues to grow as we head into the final three months of 2012. We have an outstanding team of colleagues. We also have more resources and capabilities than ever before; more offices, better technology, a stronger array of products and enhanced reputation. And we continue to be committed to our longstanding values and are focus on our clients as a premier private and business bank. This combination has served City National very well for almost 60 years and will continue to do so in the future.

Now let me turn the call over to our CFO, Chris Carey, for a more detail on our third quarter results. Chris?

Chris Carey

Thanks, Russell. Good afternoon all. I'm going to say a few words about net interest margin, FDIC covered assets, noninterest income and expenses, but first obviously we're very pleased with the Company's performance, both in third quarter and the year-to-date. The 44% growth in our earnings certainly has a nice sound to it. Looking at net interest margin, we managed to grow significantly this quarter despite the margin pressure at 358 basis points. It did decline significantly from last quarter although most of this was expected.

Our second quarter margin included a very high level of prepay interest related to cover loans, was declined 5 million this quarter and loan fees were also down. Margin pressure is an uncomfortable fact of life. It banks across the country and it's no different here. It's flattening yield curve is putting pressure on our fixed rate loan and security portfolios.

As Russell mentioned earlier, deposit growth was phenomenal this quarter. The Company has significant access liquidity which we effectively deployed more effectively in the future to quality loans. We also have been active on the acquisition front in 2012 and will continue to look to more opportunities.

Turning to covered assets, as most of you know we've got quite a lot of detail about the portfolio on page 14 of the financial tables that accompany our news release. Our loan portfolio is performing very well, much in line with our expectations. At quarter end, it stood at 1.1 billion and had a base yield of 6.6%.

In addition to the interest, we recognize some covered loans, the company each quarter records the sale of impairments and income from prepaid interest, REO sales as well as other income expense from the FDR (inaudible) activity. The totals this quarter – the totals can vary each quarter. And in this quarter, it came in at 1.8 million. We would normally expect it to be around zero or slightly negative as it was much of last year.

From our news release, you can also see we recorded 4.8 million in pre-tax gains on investments. So after tax, these two items are about 3.8 million or $0.07 a share and a small amount of security gains and a two other smaller items and we estimate that core earnings this quarter came in at roughly in the dollar range versus a $1.10 reported.

That brings me to noninterest income. It was up significantly from the second quarter thanks largely to higher wealth management income. And as we've also said, this reflected both the acquisition of Rochdale and an improved performance by the rest of our wealth management business particularly City National Securities. The growth of other noninterest income was due to gains on investments, small amount of trading security gains from mark-to-market and higher income from slot transitions.

It also includes incremental lease income from another one of our recent acquisitions, First America. Now looking at expansions, our colleagues did a very good job of pulling down costs in the third quarter. Excluding the acquisition of Rochdale and First America, expenses were down 2% from the third quarter of 2011 and up approximately 3% from the second quarter of this year. We will continue to manage expenses carefully, as we invest in selected growth opportunities.

In summary, heading to the final quarter of 2012, we're pleased with (inaudible). We'll continue to focus on what we do best, adding clients and building strong relationships with them, generating high quality assets, investing strategically in new products and technologies, managing our resources efficiently and delivering long-term value to our shareholders. Now Russell and I will be happy to take your questions.

Question-and-Answer Session

Operator

At this time, I would like to invite questions from analysts and investors. (Operator Instructions). Your first question comes from the line of Steven Alexopoulos, JPMorgan.

Steven Alexopoulos – JPMorgan

I wanted to start, if we look at the jump in fee revenues in the expense items, a lot of that was related to the deal, were there any unusual items we need to be aware of or are these pretty good run rates moving into 4Q?

Russell Goldsmith

Well, Steve, there are a couple of categories I mean in the quarter numbers, trust and brokerage and cash management international, there's – those are kind of -- generally run rate numbers depends on what happens in the environment. But we had a gain on disposal of assets and half of that is from the corporate portfolio, half of that is from our own. And then in other category, as I said, we had some gains on investments. We had higher swap income. Those are probably the two biggest items. We had the residual income that's higher compared to last year because we didn't have any leasing income in there last year. So there's certainly nonrecurring items in there, but plenty of items that are going to recur.

Steven Alexopoulos – JPMorgan

Okay. Chris, on the margin, if you strip out all the noise in the quarter, what would you ballpark the core margin pressures currently running ahead?

Chris Carey

Well, I think that the biggest thing you can point to, Steve, is that the prepay income came down from the very high level last quarter of 27 to 22. And that's going to bounce around, but we were sort of thinking that 15 might be a place that would finish the rest of this year out and it came in at 22. So much of that gets offset in noninterest income, but I'd say that's – there's 7 million in there, another 10 or 12 basis points and on a normal basis, we would think that would go down to that level. It doesn't affect the bottom line very much but it will bring the margin down by probably another 12 basis points.

Steven Alexopoulos – JPMorgan

Okay. And on the securities portfolio, Chris, I mean it was down I guess 20 basis points or so in terms of the yield. How are you thinking about pressure there? I know you invested about $1 billion this quarter?

Chris Carey

In the particular case of securities portfolio, I think the worst is behind us. I think we'll get a little bit more pressure but I think the worst of the impact of the flattening yield curve is behind us. The loan portfolio, particularly residential and what’s going on in that whole space might have a little bit more. But I'm not as concerned about the securities portfolio.

Steven Alexopoulos – JPMorgan

Got you. Just a final one. You seem to seeing acceleration in growth in commercial real estate. Can you talk about what’s driving that and how that price income compared to C&I? Thanks.

Chris Carey

It’s just a mix -- I think you're seeing some investor pick up, you're also seeing some construction pick up and you're seeing some syndicated pick up. So it's a little bit across the range.

Russell Goldsmith

This quarter, we even had a construction project that got completed and we felt very good about it and that doesn’t happen that much lately, but it moved into our return portfolio.

Steven Alexopoulos – JPMorgan

What about pricing on those?

Chris Carey

The pricing, I mean overall I'd say there's pricing pressure there, but I don't think it's as bad as some we're seeing in our areas.

Russell Goldsmith

We need to move on to the next guy, Steve. You can come back at the end of the queue.

Steven Alexopoulos – JPMorgan

All right, thanks.

Operator

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

Aaron Deer -- Sandler O'Neill

Just following up on Steve's question on the other income line. You identified some – I might have misheard there, it was volatile if not nonrecurring. But one of the items mentioned was lease income. Is that something that is more recurring and if so, what kind of numbers were you thinking of there?

Chris Carey

That is typically more recurring. It's going to be a little variable. I don't know that I’d call volatile but variable. It was $3.5million this quarter. So we would -- you know that number's going to not be that every quarter, but it's still going to be a healthy number.

Aaron Deer -- Sandler O'Neill

Okay. And then obviously the growth this quarter was pretty impressive. I'm just wondering in terms of this sustainability that what is the pipeline, loan pipeline stand today relative to a few months ago and any sort of seasonal endpoints that we should be thinking about here for the fourth quarter?

Chris Carey

Well, first I'd always say, I'm always a little skeptical about pipelines. Pipelines don't necessarily have a direct correlation, but I get the point of the question. And obviously we look at pipelines. And I think there it's a mix. I think we're seeing some improvements in some areas of the bank in terms of loan pipelines and in some other areas we're seeing some of the sit on the sidelines caution as people kind of wait out what's happening with the economy and Washington. So I think that it's a little hard to predict whether it's going to be more or less robust (inaudible) come in or fall out that you can't totally predict. But I would say that there's not a dramatic increase or a dramatic decrease at this point in time.

Aaron Deer -- Sandler O'Neill

Okay, great. Thanks for taking my questions.

Chris Carey

Sure. Thank you.

Operator

Your next question is from the line of Jennifer Demba, SunTrust Robinson.

Jennifer Demba -- SunTrust Robinson

A question about credit cards and if you – it seems like the industry is continuing to see overall credit card leverage, I wonder what you think your trajectory will be as we head into 2013 and if you expect provisioning and environment cost relate to credit to continue to come down?

Chris Carey

Well, it's pretty hard for it to come down for (inaudible). We've provisioned $3 million for the year. We obviously benefitted from some recoveries and from very strong credit quality. We haven’t put out a forecast for next year. But I certainly don’t think our credit costs are going to be any lower next year.

Jennifer Demba -- SunTrust Robinson

Specifically on the environmental side, do you have any expectations there?

Chris Carey

What do you mean by that?

Jennifer Demba -- SunTrust Robinson

OREO costs, legal costs, things like that that occur in the operating expense line.

Chris Carey

Yeah, I would say in general, we would expect those to come down still, more on the covered assets side, the bank numbers have gotten a lot smaller in there. There’s room for them to go. Eventually, they will get to zero. But the overall trend would still be going down.

Jennifer Demba -- SunTrust Robinson

Okay, thank you.

Chris Carey

Thank you.

Operator

Your next question is from the line of Joe Morford, RBC.

Joe Morford -- RBC

Good afternoon and Russell, you're not – you're missing out on the postseason baseball down there.

Russell Goldsmith

Well, I'm rooting for your Giants. What’s the score right now?

Joe Morford -- RBC

I don’t know. I've been focused on your call.

Russell Goldsmith

Joe, that's very impressive that you don’t have the TV on in the background. I’ll have to check it.

Joe Morford -- RBC

I appreciate the question. I guess the question from me was on the just the liquidity and big growth and deposits. I recognized the primary focus is on using that to fund loan growth, but security balances have increased a lot too. I was just curious where are you (inaudible) in these days. Has the strategy changed at all on the types of deals you are getting right now?

Russell Goldsmith

No strategy shift. We're staying generally shorter and not taking any real credit risk. And we're still prepared for the eventual when rates go up.

Joe Morford -- RBC

Okay. And then the other question was just on kind of capital management. Obviously you've been pretty active on the acquisition from and you got some dividend increases. Is there any reason to think that you might start to do some share buybacks going into next year in the capital plan or is it again likely to keep the palate dry for other dealer opportunities?

Russell Goldsmith

Yeah, I don't think we anticipate doing share buybacks for a variety of reasons. I would say to your first question, Joe, I think it's interesting, I was looking at the nine-month numbers and if you take a look at our average deposits over that nine-month period, we're up 11% and our loans in that period were up 15%. Now given the different faces, that means deposits were up 2.2 billion on average and loans were up 1.8 billion. But I think it's actually kind of an encouraging fact that on a bit of a lag basis, we've been almost keeping pace this year with the growth and deposits with the (inaudible) and loans. I'm not predicting anything for the future, but I think our team has done a good job to be able to stay as close to the dramatic deposit growth this year than it has. And obviously that goes to the point about the securities. In the short run, we got to invest it in stuff that's not all that high yielding because if our goal is to have the liquidity available for lending.

Unidentified Analyst

Right. Yeah, I know the growth's been impressive there also. Okay, thanks so much.

Russell Goldsmith

Thank you.

Operator

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

John Pancari -- Evercore Partners

Chris, can you just – on the other noninterest income line again, I appreciate you giving us the color on the – some of the items there, but I was just wondering the investment distribution gain and the swap income, can you help us quantify that just so we can see how much of that could be lumpy and nonrecurring next quarter?

Chris Carey

You know what, I mean I think the investment distribution gain we think is very lumpy and we certainly will have quarters where that will be zero. The swap income, and that was roughly 5 million or 4.8 million. The swap income was 1.8 million and its variable, but we always have something in a quarter and some quarters it's higher than the others. So it was up this quarter. But in this environment where people are looking to get fixed rate loans in a lot of banks rather have them be floating rate loans with the eventual rise in rates, I mean there's an opportunity I think a lot of banks are taking advantage of.

Russell Goldsmith

Yeah, I think the importance so people understand that we're in fact brokering swaps for our clients.

John Pancari -- Evercore Partners

Okay. So the investment distribution gain, that was 5 million; the swap income about 2 million and the lease income about 3.5?

Chris Carey

Correct. That's right.

John Pancari -- Evercore Partners

Okay, all right. And then secondly on the trust investment management line, was that all that increase related to Rochdale, and would you say – I mean you also indicated better performance, but would you say that's also at a sustainable level where it came in this quarter?

Chris Carey

I think that line is at a sustainable level unless you guys are predicting a big drop in the stock market.

John Pancari -- Evercore Partners

You'll never know. Okay, all right. Thank you. That's all for – but lastly, Chris, can you just talk a little bit about the loan yield compression in the quarter and then how that plays into your outlook there? It came in 17 bips. I know that was partly impacted by FDIC, but I want to see if I can get more color on that compression?

Chris Carey

I mean it's the pricing in some of our markets and some of our business areas is very intense and some it's not. But I think you also have this level of yield particularly that's affecting mortgages. So I mean I think we're going to still see some more pressure there. But hopefully over the next several quarters, it will [abate].

John Pancari -- Evercore Partners

Okay. Thank you.

Chris Carey

You're welcome.

Operator

As a reminder, please limit yourself to one question and one follow-up question. Your next question comes from the line of Brett Rabatin, Sterne, Agee.

Brett Rabatin -- Sterne, Agee

Good afternoon. I wanted to ask – just given the really strong deposit growth and kind of what maybe has transpired so for in 4Q and in the comfort with capital ratios and as it relates to that, any thoughts on an off balance sheet product deposit wise being more of a focus going forward?

Russell Goldsmith

Well, we don't really talk about volumes during the quarter. We have a very successful or balance sheet product that has about 5 billion in, in our money market funds. So there is an alternative and I think those rates are a little higher these days and those are growing a little bit. So – I think it's putting some pressure on some of our capital ratios but we're not – we still feel like we're in pretty good shape.

Brett Rabatin -- Sterne, Agee

Okay, great. Thank you.

Operator

Your next question comes from the line of Brian Zabora, Stifel Nicolaus.

Brian Zabora -- Stifel Nicolaus

A question on Rochdale, can you give us a sense of how much that contributed to pre-provisioning income this quarter?

Russell Goldsmith

I'm sorry, what's that?

Brian Zabora -- Stifel Nicolaus

Rochdale, how much did that contribute pre-provisioning income this quarter?

Russell Goldsmith

Yeah, we don't really break out the very specific details of the different acquisitions we're doing.

Brian Zabora -- Stifel Nicolaus

Is there any potential car sales going forward or could this be the run rate for the additional cost that you took on with Rochdale?

Russell Goldsmith

I think there's probably some modest cost saves over the next year or so.

Brian Zabora -- Stifel Nicolaus

Great. Thanks for taking my questions.

Operator

Your next question comes from the line of Casey Haire with Jefferies.

Casey Haire -- Jefferies

Just a follow-up on the capital ratio question in the face of the pretty strong deposit growth. The tier 1 leverage at 629, is there a minimum – is there a floor that you guys would now like to evade there?

Russell Goldsmith

We have higher capital at the banks, but we tend to try to keep that at 6. So we're getting closer to that. And we don't expect exactly the same level of deposit growth in the fourth quarter either, but we do a forecast and healthy deposit growth.

Casey Haire -- Jefferies

Okay. And then you mentioned still looking for acquisitions in terms, what kind of proper targets are you looking at. Are you looking more bank side or looking to boost the fee income?

Russell Goldsmith

Well, I think as we've demonstrated in the last couple of quarters and throughout this year, we're somewhat agnostic in terms of looking for opportunities that fit into our focus and the various lines of business that we have. So we expanded equipment leasing, we're with the acquisition which we're delighted with about with First American. Obviously wealth management is a real part of the company, we're really pleased about the important acquisition of Rochdale and we've added people as I mentioned, whether it's our second franchise finance team, our AVL team and of course we did four bank deals from the FDIC over the past few years.

So we continue to look at opportunities essentially the board that fit into the business that we're in and we're pretty disciplined buyers and pretty choosy about who we want to be in business in. But there is a sense that we have – if we find a terrific opportunity in any of the areas, whether it's a specialty banking area of an actual bank or the wealth management business, we're interested in all of those.

Casey Haire -- Jefferies

Okay, thank you.

Operator

(Operator Instructions). At this time, there are no more questions in the audio queue, so I would like to turn the call back over to Mr. Goldsmith.

Russell Goldsmith

Well thank you operator and thank you all for joining our call today. We appreciate your time and your questions and your interest in City National and of course look forward to speaking with you again when we announce our year-end results in January. Meanwhile, I know you feel free to call Chris or me with any other questions that may occur to you, but now you can turn back and see how the Giants are doing and get ready for the Yankee game. With that operator, thank you very much.

Operator

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

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