10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                  

Commission file number 1-10521

CITY NATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	95-2568550
(State of Incorporation)	(I.R.S. Employer Identification No.)

City National Plaza

555 South Flower Street, Los Angeles, California, 90071

(Address of principal executive offices)(Zip Code)

(213) 673-7700

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x  No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x Accelerated filer o Non-accelerated filer o
(Do not check if a smaller
reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No

As of April 30, 2015, there were 55,605,256 shares of Common Stock outstanding (including unvested restricted shares).

TABLE OF CONTENTS

PART I
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	50
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	81
Item 4.	Controls and Procedures	86
PART II
Item 1A.	Risk Factors	87
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	87
Item 6.	Exhibits	87

2

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CITY NATIONAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,			December 31,
(in thousands, except share amounts)	2015			2014
Assets
Cash and due from banks	$	433,670		$	336,470
Due from banks - interest-bearing	334,014			119,981
Federal funds sold and securities purchased under resale agreements	200,000			200,000
Securities available-for-sale - cost $5,201,001 and $5,894,509 at March 31, 2015 and December 31, 2014, respectively:
Securities pledged as collateral	21,068			14,654
Held in portfolio	5,189,320			5,868,329
Securities held-to-maturity - fair value $3,510,553 and $3,484,647 at March 31, 2015 and December 31, 2014, respectively:
Securities pledged as collateral	521,963			521,262
Held in portfolio	2,891,843			2,905,769
Trading securities	102,546			173,188
Loans and leases, excluding covered loans	20,910,355			20,337,206
Less: Allowance for loan and lease losses	308,858			310,149
Loans and leases, excluding covered loans, net	20,601,497			20,027,057
Covered loans, net of allowance for loan losses	470,484			502,371
Net loans and leases	21,071,981			20,529,428
Premises and equipment, net	202,208			207,700
Deferred tax asset	228,273			233,811
Goodwill	635,868			635,868
Customer-relationship intangibles, net	33,454			34,831
Affordable housing investments	190,347			186,423
Customers’ acceptance liability	2,390			17,664
Other real estate owned ($11,552 and $12,760 covered by FDIC loss share at March 31, 2015 and December 31, 2014, respectively)	17,509			23,496
FDIC indemnification asset	43,256			50,511
Other assets	579,189			537,847
Total assets	$	32,698,899		$	32,597,232
Liabilities
Demand deposits	$	18,579,674		$	18,030,021
Interest checking deposits	2,751,487			2,736,391
Money market deposits	6,011,679			6,198,798
Savings deposits	506,188			469,931
Time deposits-under $100,000	152,121			155,568
Time deposits-$100,000 and over	515,999			517,394
Total deposits	28,517,148			28,108,103
Short-term borrowings	4,400			322,861
Long-term debt	634,425			638,600
Reserve for off-balance sheet credit commitments	28,660			27,811
Acceptances outstanding	2,390			17,664
Other liabilities	456,180			499,514
Total liabilities	29,643,203			29,614,553
Redeemable noncontrolling interest	37,326			39,978
Commitments and contingencies
Shareholders’ equity
Preferred stock, par value $1.00 per share; 5,000,000 shares authorized; 275,000 shares issued at March 31, 2015 and December 31, 2014	267,616			267,616
Common stock, par value $1.00 per share; 75,000,000 shares authorized; 55,510,321 and 55,162,455 shares issued at March 31, 2015 and December 31, 2014, respectively	55,510			55,162
Additional paid-in capital	599,800			578,046
Accumulated other comprehensive income (loss)	5,031			(7,074		)
Retained earnings	2,109,157			2,071,230
Treasury shares, at cost - 313,965 and 377,224 shares at March 31, 2015 and December 31, 2014, respectively	(18,744		)	(22,279		)
Total common shareholders’ equity	2,750,754			2,675,085
Total shareholders’ equity	3,018,370			2,942,701
Total liabilities and shareholders’ equity	$	32,698,899		$	32,597,232

 See accompanying Notes to the Unaudited Consolidated Financial Statements.

3

CITY NATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	For the three months ended
	March 31,
(in thousands, except per share amounts)	2015			2014
Interest income
Loans and leases	$	184,032		$	169,696
Securities	42,072			41,576
Due from banks - interest-bearing	136			443
Federal funds sold and securities purchased under resale agreements	1,241			1,370
Total interest income	227,481			213,085
Interest expense
Deposits	1,920			2,134
Federal funds purchased and securities sold under repurchase agreements	71			—
Subordinated debt	3,746			6,104
Other long-term debt	5,164			5,049
Total interest expense	10,901			13,287
Net interest income	216,580			199,798
Provision for credit losses on loans and leases, excluding covered loans	—			—
Provision for losses on covered loans	497			4,655
Net interest income after provision	216,083			195,143
Noninterest income
Trust and investment fees	55,521			53,306
Brokerage and mutual fund fees	10,598			10,042
Cash management and deposit transaction charges	12,633			12,033
International services	10,668			10,395
FDIC loss sharing expense, net	(6,688		)	(7,083		)
Gain on disposal of assets	110			2,826
Gain on sale of securities	3,376			2,122
Other	24,922			17,607
Impairment loss on securities:
Total other-than-temporary impairment loss on securities	(293		)	—
Less: Portion of loss recognized in other comprehensive income	228			—
Net impairment loss recognized in earnings	(65		)	—
Total noninterest income	111,075			101,248
Noninterest expense
Salaries and employee benefits	144,568			136,833
Net occupancy of premises	16,073			16,094
Legal and professional fees	16,938			12,950
Information services	9,860			9,346
Depreciation and amortization	14,982			7,828
Amortization of intangibles	1,377			1,487
Marketing and advertising	8,830			9,775
Office services and equipment	5,136			4,910
Other real estate owned	2,731			1,433
FDIC assessments	5,094			1,391
Other operating	8,853			8,805
Total noninterest expense	234,442			210,852
Income before income taxes	92,716			85,539
Income taxes	30,597			31,010
Net income	$	62,119		$	54,529
Less: Net income attributable to noncontrolling interest	553			699
Net income attributable to City National Corporation	$	61,566		$	53,830
Less: Dividends on preferred stock	4,094			4,094
Net income available to common shareholders	$	57,472		$	49,736
Net income per common share, basic	$	1.03		$	0.90
Net income per common share, diluted	$	1.01		$	0.89
Weighted-average common shares outstanding, basic	55,422			54,689
Weighted-average common shares outstanding, diluted	56,306			55,429
Dividends per common share	$	0.35		$	0.33

See accompanying Notes to the Unaudited Consolidated Financial Statements.

4

CITY NATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	For the three months ended
	March 31,
(in thousands)	2015			2014
Net income	$	62,119		$	54,529
Other comprehensive income, net of tax:
Securities available-for-sale:
Net unrealized gains arising during the period	14,217			12,553
Reclassification adjustment for net gains included in net income	(1,969		)	(1,275		)
Non-credit related impairment loss	(133		)	—
Foreign currency translation adjustments	(10		)	—
Total other comprehensive income	12,105			11,278
Comprehensive income	$	74,224		$	65,807
Less: Comprehensive income attributable to noncontrolling interest	553			699
Comprehensive income attributable to City National Corporation	$	73,671		$	65,108

See accompanying Notes to the Unaudited Consolidated Financial Statements.

5

CITY NATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the three months ended
	March 31,
(in thousands)	2015			2014
Cash Flows From Operating Activities
Net income	$	62,119		$	54,529
Adjustments to net income:
Provision for losses on covered loans	497			4,655
Depreciation and amortization	14,982			7,828
Amortization of intangibles	1,377			1,487
Share-based employee compensation expense	6,227			5,397
Deferred income tax benefit	(3,211		)	(3,237		)
Gain on disposal of assets	(110		)	(2,826		)
Gain on sale of securities	(3,376		)	(2,122		)
Impairment loss on securities	65			—
Other, net	9,583			4,948
Net change in:
Trading securities	70,633			20,678
Other assets and other liabilities, net	(92,959		)	(88,563		)
Net cash provided by operating activities	65,827			2,774
Cash Flows From Investing Activities
Purchase of securities available-for-sale	(83,767		)	(330,444		)
Sales of securities available-for-sale	398,166			377,115
Maturities and paydowns of securities available-for-sale	375,712			823,410
Purchase of securities held-to-maturity	(42,637		)	(282,679		)
Maturities and paydowns of securities held-to-maturity	54,856			36,337
Loan originations, net of principal collections	(530,516		)	(523,514		)
Net payments for premises and equipment	(10,008		)	(8,831		)
Other investing activities, net	(851		)	6,676
Net cash provided by investing activities	160,955			98,070
Cash Flows From Financing Activities
Net increase in deposits	409,045			52,329
Net decrease in federal funds purchased	(320,000		)	—
Issuance of long-term debt	8,439			7,907
Repayment of long-term debt	(11,071		)	(10,088		)
Proceeds from exercise of stock options	21,320			13,207
Tax benefit from exercise of stock options	3,474			2,970
Cash dividends paid	(23,449		)	(22,141		)
Other financing activities, net	(3,307		)	(16,250		)
Net cash provided by financing activities	84,451			27,934
Net increase in cash and cash equivalents	311,233			128,778
Cash and cash equivalents at beginning of year	656,451			935,946
Cash and cash equivalents at end of period	$	967,684		$	1,064,724
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest	$	18,504		$	22,121
Income taxes	39,022			39,399
Non-cash investing activities:
Transfer of loans to other real estate owned	$	1,085		$	2,033

See accompanying Notes to the Unaudited Consolidated Financial Statements.

6

CITY NATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

									Accumulated
	Common					Additional			other									Total
	shares	Preferred		Common		paid-in			comprehensive			Retained			Treasury			shareholders’
(in thousands, except share amounts)	issued	stock		stock		capital			income (loss)			earnings			shares			equity
Balance, December 31, 2013	54,667,295	$	267,616	$	54,667	$	541,210		$	(15,641	)	$	1,918,163		$	(25,029	)	$	2,740,986
Adjustment to initially apply Accounting Standards Update 2014-01	—	—		—		—			—			(11,941		)	—			(11,941		)
Balance, January 1, 2014	54,667,295	267,616		54,667		541,210			(15,641		)	1,906,222			(25,029		)	2,729,045
Net income (1)	—	—		—		—			—			53,830			—			53,830
Other comprehensive income, net of tax	—	—		—		—			11,278			—			—			11,278
Issuance of shares under share-based compensation plans	231,763	—		232		6,702			—			—			2,492			9,426
Share-based employee compensation expense	—	—		—		4,459			—			—			—			4,459
Tax benefit from share-based compensation plans	—	—		—		2,866			—			—			—			2,866
Dividends:
Preferred	—	—		—		—			—			(4,094		)	—			(4,094		)
Common	—	—		—		—			—			(18,224		)	—			(18,224		)
Net change in deferred compensation plans	—	—		—		181			—			—			—			181
Change in redeemable noncontrolling interest	—	—		—		(5,429		)	—			—			—			(5,429		)
Balance, March 31, 2014	54,899,058	$	267,616	$	54,899	$	549,989		$	(4,363	)	$	1,937,734		$	(22,537	)	$	2,783,338
Balance, December 31, 2014	55,162,455	$	267,616	$	55,162	$	578,046		$	(7,074	)	$	2,071,230		$	(22,279	)	$	2,942,701
Net income (1)	—	—		—		—			—			61,566			—			61,566
Other comprehensive income, net of tax	—	—		—		—			12,105			—			—			12,105
Issuance of shares under share-based compensation plans	347,596	—		348		14,459			—			—			3,536			18,343
Share-based employee compensation expense	—	—		—		4,252			—			—			—			4,252
Tax benefit from share-based compensation plans	—	—		—		3,211			—			—			—			3,211
Dividends:
Preferred	—	—		—		—			—			(4,094		)	—			(4,094		)
Common	—	—		—		—			—			(19,545		)	—			(19,545		)
Net change in deferred compensation plans	270	—		—		105			—			—			(1		)	104
Change in redeemable noncontrolling interest	—	—		—		(273		)	—			—			—			(273		)
Balance, March 31, 2015	55,510,321	$	267,616	$	55,510	$	599,800		$	5,031		$	2,109,157		$	(18,744	)	$	3,018,370

(1)	Net income excludes net income attributable to redeemable noncontrolling interest of $553 and $699 for the three-month periods ended March 31, 2015 and 2014, respectively.
	Redeemable noncontrolling interest is reflected in the mezzanine section of the consolidated balance sheets. See Note 17 of the Notes to the Unaudited Consolidated Financial Statements.

See accompanying Notes to the Unaudited Consolidated Financial Statements.

7

CITY NATIONAL CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Summary of Significant Accounting Policies

Organization

City National Corporation (the “Corporation”) is the holding company for City National Bank (the “Bank”). The Bank delivers banking, investment and trust services through 75 offices in Southern California, the San Francisco Bay area, Nevada, New York City, Nashville, Tennessee and Atlanta, Georgia. As of March 31, 2015, the Corporation had four consolidated investment advisory affiliates and one unconsolidated subsidiary, Business Bancorp Capital Trust I. Because the Bank comprises substantially all of the business of the Corporation, references to the “Company” mean the Corporation and the Bank together. The Corporation is approved as a financial holding company pursuant to the Gramm-Leach-Bliley Act of 1999.

Consolidation

The consolidated financial statements of the Company include the accounts of the Corporation, its non-bank subsidiaries, the Bank and the Bank’s wholly owned subsidiaries, after the elimination of all material intercompany transactions. It also includes noncontrolling interest, which is the portion of equity in a subsidiary not attributable to a parent. Redeemable noncontrolling interests are noncontrolling ownership interests that are redeemable at the option of the holder or outside the control of the issuer. The redeemable noncontrolling interests of third parties in the Corporation’s investment advisory affiliates are not considered to be permanent equity and are reflected in the mezzanine section between liabilities and equity in the consolidated balance sheets. Noncontrolling interests’ share of subsidiary earnings is reflected as Net income attributable to noncontrolling interest in the consolidated statements of income.

The Company’s investment management and wealth advisory affiliates are organized as limited liability companies. The Corporation generally owns a majority position in each affiliate and certain management members of each affiliate own the remaining shares. The Corporation has contractual arrangements with its affiliates whereby a percentage of revenue is allocable to fund affiliate operating expenses (“operating share”) while the remaining portion of revenue (“distributable revenue”) is allocable to the Corporation and the noncontrolling owners. All majority-owned affiliates that meet the prescribed criteria for consolidation are consolidated. The Corporation’s interests in investment management affiliates in which it holds a noncontrolling share are accounted for using the equity method. Additionally, the Company has various interests in variable interest entities (“VIEs”) that are not required to be consolidated. See Note 16 for a more detailed discussion on VIEs.

Use of Estimates

The Company’s accounting and reporting policies conform to generally accepted accounting principles (“GAAP”) and practices in the financial services industry. To prepare the financial statements in conformity with GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and income and expenses during the reporting period. Circumstances and events that differ significantly from those underlying the Company’s estimates and assumptions could cause actual financial results to differ from those estimates. The material estimates included in the financial statements relate to the allowance for loan and lease losses, the reserve for off-balance sheet credit commitments, other real estate owned (“OREO”), valuation of share-based compensation awards, income taxes, goodwill and intangible asset impairment, securities impairment, private equity and alternative investments impairment, valuation of assets and liabilities acquired in business combinations, including contingent consideration liabilities, subsequent valuations of acquired impaired loans, Federal Deposit Insurance Corporation (“FDIC”) indemnification asset, valuation of noncontrolling interest, and the valuation of financial assets and liabilities reported at fair value.

The Company has applied its critical accounting policies and estimation methods consistently in all periods presented in these financial statements. The Company’s estimates and assumptions are expected to change as changes in market conditions and the Company’s portfolio occur in subsequent periods.

8

Note 1. Summary of Significant Accounting Policies (Continued)

Basis of Presentation

The Company is on the accrual basis of accounting for income and expenses. The results of operations reflect any adjustments, all of which are of a normal recurring nature, unless otherwise disclosed in this Form 10-Q, and which, in the opinion of management, are necessary for a fair presentation of the results for the periods presented. In accordance with the usual practice of banks, assets and liabilities of individual trust, agency and fiduciary funds have not been included in the financial statements. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

The results for the 2015 interim periods are not necessarily indicative of the results expected for the full year. The Company has not made any significant changes in its critical accounting policies or in its estimates and assumptions from those disclosed in its 2014 Annual Report other than the adoption of new accounting pronouncements and other authoritative guidance that became effective for the Company on or after January 1, 2015. Refer to Accounting Pronouncements for discussion of accounting pronouncements adopted in 2015.

Certain prior period amounts have been reclassified to conform to the current period presentation.

Accounting Pronouncements

The following is a summary of accounting pronouncements that became effective during the three months ended March 31, 2015:

·In January 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-01, Investments—Equity Method and Joint Ventures (Topic 323), Accounting for Investments in Qualified Affordable Housing Projects (“ASU 2014-01”). ASU 2014-01 permits an entity to make an accounting policy election to apply a proportionate amortization method to its low income housing tax credit investments if certain conditions are met. Under the proportionate amortization method, an investor amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received, and recognizes the amortization in the income statement as a component of income taxes attributable to continuing operations. On January 1, 2015, the Company adopted ASU 2014-01 and elected to apply the proportionate amortization method to its low income housing tax credit investments. Following adoption, the Company recognizes amortization of its tax credit investments as a component of income taxes. The Company previously recognized amortization as a component of noninterest expense. Prior periods presented in the Company’s consolidated financial statements have been adjusted to reflect retrospective adoption of ASU 2014-01 as follows:

	Consolidated Balance Sheet
	As of December 31, 2014
(in thousands)	As Reported		As Adjusted
			(Unaudited)
Assets
Deferred tax asset	$	230,376	$	233,811
Affordable housing investments	203,010		186,423
Other assets	537,826		537,847
Shareholders’ equity
Retained earnings	2,084,361		2,071,230

9

Note 1. Summary of Significant Accounting Policies (Continued)

	Consolidated Income Statement
	For the three months ended
	March 31, 2014
(in thousands, except per share amounts)	As Reported		As Adjusted
	(Unaudited)
Noninterest expense
Other operating	$	12,846	$	8,805
Income taxes	26,288		31,010
Net income	55,210		54,529
Net income per common share, basic	$	0.91	$	0.90
Net income per common share, diluted	$	0.90	$	0.89

	Consolidated Statement of Cash Flows
	For the three months ended
	March 31, 2014
(in thousands)	As Reported			As Adjusted
	(Unaudited)
Cash Flows From Operating Activities
Net income .	$	55,210		$	54,529
Adjustments to net income:
Deferred income tax benefit .	(2,679		)	(3,237		)
Other, net	3,720			4,948
Net change in:
Other assets and other liabilities, net	(88,574		)	(88,563		)

·In January 2014, the FASB issued ASU 2014-04, Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40), Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (“ASU 2014-04”). ASU 2014-04 requires entities to reclassify consumer mortgage loans collateralized by residential real estate to OREO when either (1) the creditor obtains legal title to the residential real estate property or (2) the borrower conveys all interest in the property to the creditor to satisfy the loan by completing a deed in lieu of foreclosure or similar agreement. The Company adopted ASU 2014-04 effective January 1, 2015 on a prospective basis. Adoption of the new guidance did not have a significant impact on the Company’s consolidated financial statements.

·In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). ASU 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The Company adopted ASU 2014-08 effective January 1, 2015 on a prospective basis. Adoption of the new guidance did not have a significant impact on the Company’s consolidated financial statements.

·In June 2014, the FASB issued ASU 2014-11, Transfers and Servicing (Topic 860), Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (“ASU 2014-11”). ASU 2014-11 aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other repurchase agreements. Going forward, these transactions will all be accounted for as secured borrowings. Under the new guidance, parties to a repurchase financing transaction will be required to separately account for the initial transfer of the financial asset and the related repurchase agreement. The initial transfer of the financial asset would be accounted for as a sale by the transferor only if all criteria for derecognition have been met. ASU 2014-11 requires new or expanded disclosures for repurchase agreements and similar transactions accounted for as secured borrowings. The Company adopted ASU 2014-11 effective January 1, 2015. Adoption of the new guidance did not have a significant impact on the Company’s consolidated financial statements.

10

Note 1. Summary of Significant Accounting Policies (Continued)

The following is a summary of recently issued accounting pronouncements:

·In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which significantly changes the consolidation analysis required under U.S. GAAP. The new consolidation guidance maintains two models: one for assessing most corporate entities based on the notion that majority voting rights indicate control (the voting model) and another for assessing entities that may be controlled through other means, such as management contracts or subordinated financial support (the variable interest model). Under the new guidance, limited partnerships will be VIEs, unless the limited partners have either substantive kick-out or participating rights. The ASU also changes the effect that fees paid to a decision maker or service provider have on the consolidation analysis. For entities other than limited partnerships, the ASU clarifies how to determine whether the equity holders (as a group) have power over the entity. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is allowed for all entities, but the guidance must be applied as of the beginning of the annual period containing the adoption date. Entities have the option of using either a full or modified retrospective approach for adoption. The Company is assessing the impact of the new guidance on its consolidated financial statements.

·In April 2015, the FASB issued ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires the debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The amendments in this ASU are to be applied on a retrospective basis. Adoption of the new guidance is not expected to have a significant impact on the Company’s consolidated financial statements.

11

Note 2. Fair Value Measurements

The following tables summarize assets and liabilities measured at fair value as of March 31, 2015 and December 31, 2014 by level in the fair value hierarchy:

			Fair Value Measurements at Reporting Date Using
(in thousands)	Balance as ofMarch 31,2015		Quoted Prices in Active MarketsLevel 1		Significant OtherObservableInputsLevel 2		SignificantUnobservable InputsLevel 3
Measured on a Recurring Basis
Assets
Securities available-for-sale:
U.S. Treasury	$	115,907	$	115,907	$	—	$	—
Federal agency - Debt	1,220,220		—		1,220,220		—
Federal agency - MBS	101,515		—		101,515		—
CMOs - Federal agency	3,204,886		—		3,204,886		—
CMOs - Non-agency	22,811		—		22,811		—
State and municipal	427,458		—		423,905		3,553
Other debt securities	116,441		—		116,441		—
Equity securities and mutual funds	1,150		1,150		—		—
Trading securities	102,546		98,014		4,532		—
Derivative assets (1)	76,695		15,117		60,406		1,172
Contingent consideration asset (1)	2,930		—		—		2,930
Total assets at fair value	$	5,392,559	$	230,188	$	5,154,716	$	7,655
Liabilities
Derivative liabilities	$	76,938	$	15,660	$	61,278	$	—
Contingent consideration liability	35,401		—		—		35,401
FDIC clawback liability	15,963		—		—		15,963
Other liabilities	904		—		904		—
Total liabilities at fair value (2)	$	129,206	$	15,660	$	62,182	$	51,364
Redeemable noncontrolling interest	$	37,326	$	—	$	—	$	37,326
Measured on a Nonrecurring Basis
Assets
Other real estate owned (3)	$	6,506	$	—	$	—	$	6,506
Private equity and alternative investments	1,078		—		—		1,078
Total assets at fair value	$	7,584	$	—	$	—	$	7,584

(1) Reported in Other assets in the consolidated balance sheets.

(2) Reported in Other liabilities in the consolidated balance sheets.

(3) Includes covered OREO.

12

Note 2. Fair Value Measurements (Continued)

			Fair Value Measurements at Reporting Date Using
(in thousands)	Balance as ofDecember 31, 2014		Quoted Prices in Active MarketsLevel 1		Significant Other ObservableInputsLevel 2		SignificantUnobservable InputsLevel 3
Measured on a Recurring Basis
Assets
Securities available-for-sale:
U.S. Treasury	$	116,926	$	116,926	$	—	$	—
Federal agency - Debt	1,398,581		—		1,398,581		—
Federal agency - MBS	104,526		—		104,526		—
CMOs - Federal agency	3,580,590		—		3,580,590		—
CMOs - Non-agency	24,014		—		24,014		—
State and municipal	479,031		—		475,484		3,547
Other debt securities	176,169		—		176,169		—
Equity securities and mutual funds	3,146		3,146		—		—
Trading securities	173,188		171,778		1,410		—
Derivative assets (1)	51,586		6,106		44,598		882
Contingent consideration asset (1)	2,930		—		—		2,930
Total assets at fair value	$	6,110,687	$	297,956	$	5,805,372	$	7,359
Liabilities
Derivative liabilities	$	51,309	$	6,623	$	44,686	$	—
Contingent consideration liability	34,983		—		—		34,983
FDIC clawback liability	15,106		—		—		15,106
Other liabilities	946		—		946		—
Total liabilities at fair value (2)	$	102,344	$	6,623	$	45,632	$	50,089
Redeemable noncontrolling interest	$	39,978	$	—	$	—	$	39,978
Measured on a Nonrecurring Basis
Assets
Other real estate owned (3)	$	5,644	$	—	$	—	$	5,644
Total assets at fair value	$	5,644	$	—	$	—	$	5,644

(1) Reported in Other assets in the consolidated balance sheets.

(2) Reported in Other liabilities in the consolidated balance sheets.

(3) Includes covered OREO.

At March 31, 2015, $5.39 billion, or approximately 16 percent, of the Company’s total assets were recorded at fair value on a recurring basis, compared with $6.11 billion, or 19 percent, at December 31, 2014. The majority of these financial assets were valued using Level 1 or Level 2 inputs. Less than one percent of total assets were measured using Level 3 inputs. At March 31, 2015, $129.2 million of the Company’s total liabilities were recorded at fair value using mostly Level 2 or Level 3 inputs, compared with $102.3 million at December 31, 2014. There were no transfers between Level 1 and Level 2 of the fair value hierarchy for assets or liabilities measured on a recurring basis during the three months ended March 31, 2015. At March 31, 2015, $7.6 million of the Company’s total assets were recorded at fair value on a nonrecurring basis, compared with $5.6 million at December 31, 2014. These assets represent less than one percent of total assets and were measured using Level 3 inputs.

13

Note 2. Fair Value Measurements (Continued)

Recurring Fair Value Measurements

Assets and liabilities for which fair value measurement is based on significant unobservable inputs are classified as Level 3 in the fair value hierarchy. The following table provides a reconciliation of the beginning and ending balances for Level 3 assets and liabilities measured at fair value on a recurring basis for the three months ended March 31, 2015 and 2014.

Level 3 Assets and Liabilities Measured on a Recurring Basis

	For the three months ended March 31, 2015
(in thousands)	Securities Available-for- Sale		EquityWarrants			Contingent Consideration Asset		Contingent Consideration Liability			FDIC Clawback Liability
Balance, beginning of period	$	3,547	$	882		$	2,930	$	(34,983	)	$	(15,106	)
Total realized/unrealized gains (losses):
Included in earnings	—		(8		)	—		—			(857		)
Included in other comprehensive income	6		—			—		—			—
Additions	—		298			—		—			—
Other (1)	—		—			—		(418		)	—
Balance, end of period	$	3,553	$	1,172		$	2,930	$	(35,401	)	$	(15,963	)

	For the three months endedMarch 31, 2014
(in thousands)	Securities Available-for- Sale			Contingent Consideration Liability			FDIC Clawback Liability
Balance, beginning of period	$	3,633		$	(49,900	)	$	(11,967	)
Total realized/unrealized gains (losses):
Included in earnings	—			—			(964		)
Included in other comprehensive income	(17		)	—			—
Settlements	—			16,250			—
Other (1)	—			(411		)	—
Balance, end of period	$	3,616		$	(34,061	)	$	(12,931	)

(1)Other rollforward activity consists of accretion of discount related to the contingent consideration liability.

Redeemable noncontrolling interest is classified as Level 3 in the fair value hierarchy and measured on a recurring basis. Redeemable noncontrolling interest is valued based on a combination of factors, including but not limited to, observable valuation of firms similar to the affiliates, multiples of revenue or profit, unique investment products or performance track records, strength in the marketplace, projected discounted cash flow scenarios, strategic value of affiliates to other entities, as well as unique sources of value specific to an individual firm. The methodology used to fair value these interests is consistent with the industry practice of valuing similar types of instruments. Refer to Note 17, Noncontrolling Interest, for a rollforward of activity for the three months ended March 31, 2015 and 2014.

Level 3 assets measured at fair value on a recurring basis include municipal auction rate securities that are classified in securities available-for-sale, a contingent consideration asset and equity warrants classified as derivative assets. Municipal auction rate securities were valued using an average yield on California variable rate notes that were comparable in credit rating and maturity to the securities held, plus a liquidity premium. The contingent consideration asset represents the fair value of future payments to be received on the sale of the Company’s retirement services recordkeeping business. The fair value of contingent consideration was determined by discounting the expected future cash flows using a bond rate for an investment grade finance company. Equity warrants in private companies obtained in association with certain loan transactions are measured at fair value on a recurring basis using the Black-Scholes option pricing model. Key inputs to the valuation model include current share estimated fair value, strike price, volatility, expected life, risk-free interest rate, and market and liquidity discounts. Several of the inputs to the valuation model incorporate assumptions by management that are not observable in the market; consequently, the valuation of warrants is classified in Level 3 of the fair value hierarchy. Refer to Note 11, Derivative Instruments, for additional discussion of equity warrants.

14

Note 2. Fair Value Measurements (Continued)

Level 3 liabilities measured at fair value on a recurring basis consist of contingent consideration and an FDIC clawback liability that are included in other liabilities. As part of its acquisition of Rochdale Investment Management, LLC and associated entities (collectively, “Rochdale”), the Company entered into a contingent consideration arrangement that requires the Company to pay additional cash consideration to Rochdale’s former shareholders at certain points in time over the six years after the date of acquisition if certain criteria, such as revenue growth and pre-tax margin, are met. In 2014, the Company made total contingent consideration payments to Rochdale’s former shareholders of approximately $17.4 million. The fair value of the remaining contingent consideration was estimated using a probability-weighted discounted cash flow model. Although the acquisition agreement does not set a limit on the total payment, the Company estimates that the remaining consideration payment could be in the range of $30 million to $53 million, but will ultimately be determined based on actual future results. The contingent consideration liability is remeasured to fair value at each reporting date until its settlement.

The FDIC clawback liability was valued using the discounted cash flow method based on the terms specified in loss-sharing agreements with the FDIC, the actual FDIC payments collected, and the following unobservable inputs: (1) risk-adjusted discount rate reflecting the Bank’s credit risk, plus a liquidity premium, and (2) loan performance assumptions such as prepayments and losses.

There were no transfers into or out of Level 3 assets or liabilities measured on a recurring basis during the three months ended March 31, 2015 and 2014.

Nonrecurring Fair Value Measurements

Assets measured at fair value on a nonrecurring basis using significant unobservable inputs include certain collateral dependent impaired loans, OREO for which fair value is not solely based on market observable inputs, and certain private equity and alternative investments. Private equity and alternative investments do not have readily determinable fair values. These investments are carried at cost and evaluated for impairment on a quarterly basis. Due to the lack of readily determinable fair values for these investments, the impairment assessment is based primarily on a review of investment performance and whether the Company expects to recover the cost of an investment.

The table below provides information about valuation method, inputs and assumptions for nonrecurring Level 3 fair value measurements. The weight assigned to each input is based on the facts and circumstances that exist at the date of measurement.

Information About Nonrecurring Level 3 Fair Value Measurements

(in thousands)	Fair Value atMarch 31,2015		Valuation Method	Unobservable Inputs
Other real estate owned	$	6,506	Third-party appraisal	- Fair values are primarily based on unadjusted appraised values. - A limited number of properties were valued using comparable sales values or income approaches, resulting in discounts to appraised values ranging from 34% to 50%.
Private equity and alternative investments	$	1,078	Cost recovery	- Fair values are based on management’s assumptions regarding recoverability of an investment based on fund operating results, investment performance, nature of the investment, market conditions, exit strategies and other relevant factors. - Fair values reflect discounts to investment carrying amounts ranging from 25% to 31%.

15

Note 2. Fair Value Measurements (Continued)

For assets measured at fair value on a nonrecurring basis, the following table presents the total net gains and losses, which include charge-offs, recoveries, specific reserves, OREO valuation write-downs and write-ups, gains and losses on sales of OREO, and impairment write-downs on private equity investments, recognized in the three months ended March 31, 2015 and 2014:

	For the three months endedMarch 31,
(in thousands)	2015			2014
Collateral dependent impaired loans:
Commercial real estate mortgages	$	—		$	(5	)
Other real estate owned (1)	(1,637		)	61
Private equity and alternative investments	(400		)	—
Total net (losses) gains recognized	$	(2,037	)	$	56

(1)Net losses and gains on OREO include amounts related to covered OREO, a significant portion of which is reimbursable by or payable to the FDIC.

Fair Value of Financial Instruments

A financial instrument is broadly defined as cash, evidence of an ownership interest in another entity, or a contract that imposes a contractual obligation on one entity and conveys a corresponding right to a second entity to require delivery or exchange of financial assets or liabilities. Refer to Note 1, Summary of Significant Accounting Policies, in the Company’s 2014 Form 10-K for additional information on fair value measurements.

The disclosure does not include estimated fair value amounts for assets and liabilities which are not defined as financial instruments but which have significant value. These assets and liabilities include the value of customer-relationship intangibles, goodwill, affordable housing investments carried at cost, other assets, deferred taxes and other liabilities. Accordingly, the total of the fair values presented does not represent the underlying value of the Company.

16

Note 2. Fair Value Measurements (Continued)

The following tables summarize the carrying amounts and estimated fair values of those financial instruments that are reported at amortized cost in the Company’s consolidated balance sheets. The tables also provide information on the level in the fair value hierarchy for inputs used in determining the fair value of those financial instruments. Most financial assets and financial liabilities for which carrying amount equals fair value are considered by the Company to be Level 1 measurements in the fair value hierarchy.

	March 31, 2015
	Carrying		Total		Fair Value Measurements Using
(in millions)	Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from banks	$	433.7	$	433.7	$	433.7	$	—	$	—
Due from banks - interest-bearing	334.0		334.0		334.0		—		—
Securities purchased under resale agreements	200.0		202.1		—		202.1		—
Securities held-to-maturity	3,413.8		3,510.6		—		3,510.6		—
Loans and leases, net of allowance	20,601.5		21,153.4		—		—		21,153.4
Covered loans, net of allowance	470.5		518.5		—		—		518.5
FDIC indemnification asset	43.3		34.6		—		—		34.6
Investment in FHLB and FRB stock	58.4		58.4		—		58.4		—
Financial Liabilities:
Deposits	$	28,517.1	$	28,518.3	$	—	$	27,849.0	$	669.3
Short-term borrowings	4.4		4.4		—		—		4.4
Long-term debt	634.4		712.8		—		617.6		95.2

	December 31, 2014
	Carrying		Total		Fair Value Measurements Using
(in millions)	Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from banks	$	336.5	$	336.5	$	336.5	$	—	$	—
Due from banks - interest-bearing	120.0		120.0		120.0		—		—
Securities purchased under resale agreements	200.0		201.1		—		201.1		—
Securities held-to-maturity	3,427.0		3,484.6		—		3,484.6		—
Loans and leases, net of allowance	20,027.1		20,576.9		—		—		20,576.9
Covered loans, net of allowance	502.4		549.1		—		—		549.1
FDIC indemnification asset	50.5		40.2		—		—		40.2
Investment in FHLB and FRB stock	58.4		58.4		—		58.4		—
Financial Liabilities:
Deposits	$	28,108.1	$	28,109.6	$	—	$	27,435.1	$	674.5
Short-term borrowings	322.9		322.9		320.0		—		2.9
Long-term debt	638.6		704.3		—		605.3		99.0

Following is a description of the methods and assumptions used in estimating the fair values of these financial instruments:

Cash and due from banks and Due from banks—interest-bearing — For these short-term instruments, the carrying amount is a reasonable estimate of fair value.

Securities purchased under resale agreements — The fair value of securities purchased under term resale agreements is determined using a combination of quoted market prices and observable market inputs such as interest rates and credit spreads.

17

Note 2. Fair Value Measurements (Continued)

Securities held-to-maturity — For securities held-to-maturity, the fair value is generally determined by quoted market prices, where available, or based on observable market inputs appropriate for the type of security.

Loans and leases — Loans and leases, excluding covered loans, are not recorded at fair value on a recurring basis. Nonrecurring fair value adjustments are periodically recorded on impaired loans that are measured for impairment based on the fair value of collateral. Due to the lack of activity in the secondary market for the types of loans in the Company’s portfolio, a model-based approach is used for determining the fair value of loans for purposes of the disclosures in the previous tables. The fair value of loans is estimated by discounting future cash flows using discount rates that incorporate the Company’s assumptions for current market yields, credit risk and liquidity premiums. Loan cash flow projections are based on contractual loan terms adjusted for the impact of current interest rate levels on borrower behavior, including prepayments. Loan prepayment assumptions are based on industry standards for the type of loans being valued. Projected cash flows are discounted using yield curves based on current market conditions. Yield curves are constructed by product type using the Company’s loan pricing model for like-quality credits. The discount rates used in the model represent the rates the Company would offer to current borrowers for like-quality credits. These rates could be different from what other financial institutions could offer for these loans.

Covered loans — The fair value of covered loans is based on estimates of future loan cash flows and appropriate discount rates, which incorporate the Company’s assumptions about market funding cost and liquidity premium. The future loan cash flows are estimated using the Company’s assumptions concerning the amount and timing of principal and interest payments, prepayments and credit losses.

FDIC indemnification asset — The fair value of the FDIC indemnification asset is estimated by discounting expected cash flows with appropriate market discount rates.

Investment in FHLB and FRB stock — Investments in Federal Home Loan Bank of San Francisco (“FHLB”) and Federal Reserve Bank (“FRB”) stock are recorded at cost. Ownership of these securities is restricted to member banks and the securities do not have a readily determinable market value. Purchases and sales of these securities are at par value with the issuer. The fair value of investments in FHLB and FRB stock is equal to the carrying amount.

Deposits — The fair value of demand and interest checking deposits, savings deposits, and certain money market accounts is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit (“CD”) is determined by discounting expected future cash flows using the rates offered by the Company for deposits of similar type and remaining maturity at the measurement date. This value is compared to the termination value of each CD given the Company’s standard early withdrawal penalties. The fair value reported is the higher of the discounted present value of each CD and the termination value after the recovery of prepayment penalties. The Company reviews pricing for its CD products weekly. This review gives consideration to market pricing for products of similar type and maturity offered by other financial institutions.

Short-term borrowings — The fair value of nonrecourse debt is determined by discounting expected cash flows with appropriate market discount rates. The carrying amount of the remaining short-term borrowings is a reasonable estimate of fair value.

Long-term debt — The fair value of long-term debt, excluding nonrecourse debt, is obtained through third-party pricing sources. The fair value of nonrecourse debt is determined by discounting expected cash flows with appropriate market discount rates.

Off-balance sheet commitments, which include commitments to extend credit, are excluded from the tables. A reasonable estimate of fair value for these instruments is the carrying amount of deferred fees and the reserve for any credit losses related to these off-balance sheet instruments. This estimate is not material to the Company’s financial position.

18

Note 3. Securities

At March 31, 2015, the Company had total securities of $8.73 billion, comprised of securities available-for-sale at fair value of $5.21 billion, securities held-to-maturity at amortized cost of $3.41 billion and trading securities at fair value of $102.5 million. At December 31, 2014, the Company had total securities of $9.48 billion, comprised of securities available-for-sale at fair value of $5.88 billion, securities held-to-maturity at amortized cost of $3.43 billion and trading securities at fair value of $173.2 million.

The following is a summary of amortized cost and estimated fair value for the major categories of securities available-for-sale and securities held-to-maturity at March 31, 2015 and December 31, 2014:

			Gross		Gross
	Amortized		Unrealized		Unrealized
(in thousands)	Cost		Gains		Losses			Fair Value
March 31, 2015
Securities available-for-sale:
U.S. Treasury	$	115,893	$	29	$	(15	)	$	115,907
Federal agency - Debt	1,219,481		1,168		(429		)	1,220,220
Federal agency - MBS	99,891		2,498		(874		)	101,515
CMOs - Federal agency	3,204,823		22,016		(21,953		)	3,204,886
CMOs - Non-agency	23,147		24		(360		)	22,811
State and municipal	421,419		6,257		(218		)	427,458
Other debt securities	115,006		1,438		(3		)	116,441
Total debt securities	5,199,660		33,430		(23,852		)	5,209,238
Equity securities and mutual funds	1,341		219		(410		)	1,150
Total securities available-for-sale	$	5,201,001	$	33,649	$	(24,262	)	$	5,210,388
Securities held-to-maturity (1):
Federal agency - Debt	$	286,581	$	9,923	$	(72	)	$	296,432
Federal agency - MBS	556,931		20,346		(567		)	576,710
CMOs - Federal agency	1,766,325		48,270		(2,749		)	1,811,846
State and municipal	717,937		23,084		(1,810		)	739,211
Other debt securities	86,032		322		—			86,354
Total securities held-to-maturity	$	3,413,806	$	101,945	$	(5,198	)	$	3,510,553
December 31, 2014
Securities available-for-sale:
U.S. Treasury	$	116,919	$	17	$	(10	)	$	116,926
Federal agency - Debt	1,401,303		558		(3,280		)	1,398,581
Federal agency - MBS	102,939		2,601		(1,014		)	104,526
CMOs - Federal agency	3,599,831		19,628		(38,869		)	3,580,590
CMOs - Non-agency	24,385		40		(411		)	24,014
State and municipal	473,272		6,139		(380		)	479,031
Other debt securities	174,352		1,817		—			176,169
Total debt securities	5,893,001		30,800		(43,964		)	5,879,837
Equity securities and mutual funds	1,508		1,988		(350		)	3,146
Total securities available-for-sale	$	5,894,509	$	32,788	$	(44,314	)	$	5,882,983
Securities held-to-maturity (1):
Federal agency - Debt	$	292,932	$	6,430	$	(255	)	$	299,107
Federal agency - MBS	553,589		13,427		(2,275		)	564,741
CMOs - Federal agency	1,811,574		29,998		(10,292		)	1,831,280
State and municipal	682,705		22,732		(1,997		)	703,440
Other debt securities	86,231		72		(224		)	86,079
Total securities held-to-maturity	$	3,427,031	$	72,659	$	(15,043	)	$	3,484,647

(1) Securities held-to-maturity are presented in the consolidated balance sheets at amortized cost. 

19

Note 3. Securities (Continued)

Proceeds from sales of securities available-for-sale were $398.2 million for the three months ended March 31, 2015, compared with $377.1 million for the three months ended March 31, 2014. There were no sales of securities held-to-maturity during the three months ended March 31, 2015 and 2014. The following table provides the gross realized gains and losses on the sales and calls of securities (including trading securities):

	For the three months ended
	March 31,
(in thousands)	2015			2014
Gross realized gains	$	3,392		$	2,602
Gross realized losses	(16		)	(480		)
Net realized gains	$	3,376		$	2,122

Interest income on securities for the three months ended March 31, 2015 and 2014 is comprised of: (i) taxable interest income of $35.0 million and $36.0 million, respectively, (ii) nontaxable interest income of $7.0 million and $5.5 million, respectively, and (iii) dividend income of $11 thousand and $9 thousand, respectively.

The following table provides the expected remaining maturities of debt securities included in the securities portfolio at March 31, 2015, except for maturities of mortgage-backed securities which are allocated according to the average life of expected cash flows. Average expected maturities will differ from contractual maturities because of the amortizing nature of the loan collateral and prepayment behavior of borrowers.

(in thousands)	One year or less		Over 1 year through 5 years		Over 5 years through 10 years		Over 10 years		Total
Securities available-for-sale:
U.S. Treasury	$	98,400	$	17,507	$	—	$	—	$	115,907
Federal agency - Debt	597,445		622,775		—		—		1,220,220
Federal agency - MBS	—		83,971		17,544		—		101,515
CMOs - Federal agency	157,341		3,047,545		—		—		3,204,886
CMOs - Non-agency	1,381		21,430		—		—		22,811
State and municipal	171,999		252,104		—		3,355		427,458
Other	57,142		59,299		—		—		116,441
Total debt securities available-for-sale	$	1,083,708	$	4,104,631	$	17,544	$	3,355	$	5,209,238
Amortized cost	$	1,081,124	$	4,097,536	$	17,600	$	3,400	$	5,199,660
Securities held-to-maturity:
Federal agency - Debt	$	—	$	—	$	132,829	$	153,752	$	286,581
Federal agency - MBS	—		49,153		503,264		4,514		556,931
CMOs - Federal agency	—		867,361		898,964		—		1,766,325
State and municipal	—		177,608		454,244		86,085		717,937
Other	—		86,032		—		—		86,032
Total debt securities held-to-maturity at amortized cost	$	—	$	1,180,154	$	1,989,301	$	244,351	$	3,413,806

20

Note 3. Securities (Continued)

Impairment Assessment

The Company performs a quarterly assessment of debt and equity securities in its investment portfolio to determine whether a decline in fair value below amortized cost is other-than-temporary. Amortized cost includes adjustments made to the cost of an investment for amortization, accretion, collection of cash and previous other-than-temporary impairment recognized in earnings. The Company’s impairment assessment of debt securities takes the following factors into consideration: the length of time and the extent to which the market value has been less than cost; the financial condition and near-term prospects of the issuer, including events specific to the issuer or industry; defaults or deferrals of scheduled interest and principal payments; external credit ratings; and whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. For equity securities, the evaluation of whether an impairment is other-than-temporary is based on whether and when an equity security will recover in value and whether the Company has the intent and ability to hold the equity security until the anticipated recovery in value occurs. If a decline in fair value is determined to be other-than-temporary, the cost basis of the individual security is written down to fair value which then becomes the security’s new cost basis. The new cost basis is not adjusted for subsequent recoveries in fair value.

Other-than-temporary impairment losses on equity securities are recognized in earnings. For debt securities, if the Company intends to sell an impaired security or it is more likely than not it will be required to sell a security prior to recovery of its amortized cost, an impairment loss is recognized in earnings for the entire difference between the amortized cost and fair value of the security on the measurement date. If the Company does not intend to sell the security or it is not more likely than not it will be required to sell the security prior to recovery of its amortized cost, the credit loss component of impairment is recognized in earnings. A credit loss is the difference between the amortized cost of the security and the present value of cash flows expected to be collected, discounted at the security’s effective interest rate at the date of acquisition. Impairment associated with factors other than credit, such as market liquidity, is recognized in other comprehensive income, net of tax.

Securities Deemed to be Other-Than-Temporarily Impaired

The Company recorded impairment losses in earnings on securities available-for-sale of $0.1 million for the three months ended March 31, 2015. There were no impairment losses recognized in earnings for the three months ended March 31, 2014. The Company recognized an after-tax amount of $0.1 million of non-credit-related other-than-temporary impairment in accumulated other comprehensive income or loss (“AOCI”) on securities classified as available-for-sale at March 31, 2015. There was no non-credit related other-than-temporary impairment recognized in AOCI on securities available-for-sale at March 31, 2014. No impairment losses were recognized in earnings or AOCI for securities held-to-maturity during the three months ended March 31, 2015 and 2014.

The following table summarizes the changes in cumulative credit-related other-than-temporary impairment recognized in earnings for debt securities for the three months ended March 31, 2015 and 2014. Credit-related other-than-temporary impairment that was recognized in earnings is reflected as an “Initial credit-related impairment” if the period reported is the first time the security had a credit impairment. A credit-related other-than-temporary impairment is reflected as a “Subsequent credit-related impairment” if the period reported is not the first time the security had a credit impairment. Cumulative impairment is reduced for securities with previously recognized credit-related impairment that were sold or redeemed during the period. Cumulative impairment is further adjusted for other changes in expected cash flows.

	For the three months ended
	March 31,
(in thousands)	2015		2014
Balance, beginning of period	$	2,470	$	4,549
Subsequent credit-related impairment	65		—
Balance, end of period	$	2,535	$	4,549

21

Note 3. Securities (Continued)

The following table provides a summary of the gross unrealized losses and fair value of investment securities that are not deemed to be other-than-temporarily impaired aggregated by investment category and length of time that the securities have been in a continuous unrealized loss position as of March 31, 2015 and December 31, 2014. The table also includes investment securities that had both a credit-related impairment recognized in earnings and a non-credit-related impairment recognized in AOCI.

	Less than 12 months				12 months or greater				Total
(in thousands)	Fair Value		Estimated Unrealized Loss		Fair Value		Estimated Unrealized Loss		Fair Value		Estimated Unrealized Loss
March 31, 2015
Securities available-for-sale:
U.S. Treasury	$	66,688	$	15	$	—	$	—	$	66,688	$	15
Federal agency - Debt	466,094		429		—		—		466,094		429
Federal agency - MBS	—		—		56,741		874		56,741		874
CMOs - Federal agency	549,307		1,652		1,195,370		20,301		1,744,677		21,953
CMOs - Non-agency	1,928		16		12,331		344		14,259		360
State and municipal	107,251		171		3,553		47		110,804		218
Other debt securities	12,609		3		—		—		12,609		3
Total debt securities	1,203,877		2,286		1,267,995		21,566		2,471,872		23,852
Equity securities and mutual funds	477		410		—		—		477		410
Total securities available-for-sale	$	1,204,354	$	2,696	$	1,267,995	$	21,566	$	2,472,349	$	24,262
Securities held-to-maturity:
Federal agency - Debt	$	—	$	—	$	5,950	$	72	$	5,950	$	72
Federal agency - MBS	34,532		81		40,762		486		75,294		567
CMOs - Federal agency	180,042		937		180,742		1,812		360,784		2,749
State and municipal	83,998		733		33,863		1,077		117,861		1,810
Total securities held-to-maturity	$	298,572	$	1,751	$	261,317	$	3,447	$	559,889	$	5,198
December 31, 2014
Securities available-for-sale:
U.S. Treasury	$	15,814	$	10	$	—	$	—	$	15,814	$	10
Federal agency - Debt	1,008,234		2,622		135,868		658		1,144,102		3,280
Federal agency - MBS	35		—		57,970		1,014		58,005		1,014
CMOs - Federal agency	871,026		3,417		1,261,695		35,452		2,132,721		38,869
CMOs - Non-agency	1,949		15		12,720		396		14,669		411
State and municipal	130,208		314		4,183		66		134,391		380
Total debt securities	2,027,266		6,378		1,472,436		37,586		3,499,702		43,964
Equity securities and mutual funds	538		350		—		—		538		350
Total securities available-for-sale	$	2,027,804	$	6,728	$	1,472,436	$	37,586	$	3,500,240	$	44,314
Securities held-to-maturity:
Federal agency - Debt	$	—	$	—	$	26,316	$	255	$	26,316	$	255
Federal agency - MBS	4,800		21		114,856		2,254		119,656		2,275
CMOs - Federal agency	202,014		2,247		588,019		8,045		790,033		10,292
State and municipal	14,851		76		95,647		1,921		110,498		1,997
Other debt securities	61,813		224		—		—		61,813		224
Total securities held-to-maturity	$	283,478	$	2,568	$	824,838	$	12,475	$	1,108,316	$	15,043

At March 31, 2015, the Company had securities available-for-sale with a fair value of $2.47 billion and securities held-to-maturity with a fair value of $559.9 million in an unrealized loss position. The debt securities in an unrealized loss position totaled 316 and included 2 U.S. Treasury notes, 12 federal agency debt securities, 17 federal agency MBS, 101 federal agency CMOs, 3 non-agency CMOs, 180 state and municipal securities and 1 other debt securities. At March 31, 2015, the Company had one equity security in an unrealized loss position.

22

Note 3. Securities (Continued)

At December 31, 2014, the Company had securities available-for-sale with a fair value of $3.50 billion and securities held-to-maturity with a fair value of $1.11 billion in an unrealized loss position. The debt securities in an unrealized loss position totaled 436 and included 2 U.S. Treasury notes, 37 federal agency debt securities, 23 federal agency MBS, 141 federal agency CMOs, 3 non-agency CMOs, 225 state and municipal securities and 5 other debt securities. At December 31, 2014, the Company had one equity security in an unrealized loss position.

Note 4. Other Investments

FHLB and FRB Stock

The Company’s investment in stock issued by the FHLB and FRB totaled $58.4 million at March 31, 2015 and December 31, 2014. Ownership of government agency securities is restricted to member banks, and the securities do not have readily determinable market values. The Company records investments in FHLB and FRB stock at cost in Other assets of the consolidated balance sheets and evaluates these investments for impairment. The Company expects to recover the full amount invested in FHLB and FRB stock.

Private Equity and Alternative Investments

The Company has ownership interests in a limited number of private equity, venture capital, real estate and hedge funds that are not publicly traded and do not have readily determinable fair values. These investments are carried at cost in the Other assets section of the consolidated balance sheets and are net of impairment write-downs, if applicable. The Company’s investments in these funds totaled $29.2 million at March 31, 2015 and December 31, 2014. A summary of investments by fund type is provided below:

(in thousands)	March 31,		December 31,
Fund Type	2015		2014
Private equity and venture capital	$	18,095	$	18,605
Real estate	7,320		7,081
Hedge	1,168		1,668
Other (1)	2,605		1,858
Total	$	29,188	$	29,212

(1) Includes direct investments in a limited number of start-up companies.

Management reviews these investments quarterly for impairment. The impairment assessment includes a review of the most recent financial statements and investment reports for each fund and discussions with fund management. An impairment loss is recognized if the Company does not expect to recover the cost of an investment. The impairment loss is recognized in Other noninterest income in the consolidated statements of income. The new cost basis of the investment is not adjusted for subsequent recoveries in value. The Company recognized $0.4 million in impairment losses on its investments during the three months ended March 31, 2015. The Company recognized no impairment losses on its investments during the three months ended March 31, 2014.

The table below provides information as of March 31, 2015 on private equity and alternative investments measured at fair value on a nonrecurring basis due to the recognition of impairment:

(in thousands) Fund Type	Fair Value		Unfunded Commitments		Redemption Frequency	Redemption Notice Period
Private equity and venture capital	$	328	$	179	None (1)	N/A
Other investments	750		—		None	N/A
Total	$	1,078	$	179

(1)Funds make periodic distributions of income but do not permit redemptions prior to the end of the investment term.

23

Note 5. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments

The following is a summary of the major categories of loans:

Loans and Leases

	March 31,			December 31,
(in thousands)	2015			2014
Commercial	$	9,455,621		$	9,360,976
Commercial real estate mortgages	3,737,137			3,539,703
Residential mortgages	5,299,947			5,106,803
Real estate construction	794,274			710,224
Home equity loans and lines of credit	791,731			785,796
Installment	186,076			184,613
Lease financing	645,569			649,091
Loans and leases, excluding covered loans	20,910,355			20,337,206
Less: Allowance for loan and lease losses	(308,858		)	(310,149		)
Loans and leases, excluding covered loans, net	20,601,497			20,027,057
Covered loans	480,236			510,979
Less: Allowance for loan losses	(9,752		)	(8,608		)
Covered loans, net	470,484			502,371
Total loans and leases	$	21,390,591		$	20,848,185
Total loans and leases, net	$	21,071,981		$	20,529,428

The loan amounts above include unamortized fees, net of deferred costs, of $0.1 million as of March 31, 2015 and deferred costs, net of unamortized fees, of $0.2 million as of December 31, 2014.

Concentrations of credit risk arise when a number of clients are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company’s lending activities are predominantly in California, and to a lesser extent, New York, the Company has various specialty lending businesses that lend to businesses located throughout the United States of America and in certain foreign countries to facilitate trade finance activities. Excluding covered loans, at March 31, 2015, California represented 73 percent of total loans outstanding and New York represented 9 percent. The remaining 18 percent of total loans outstanding represented other states and countries. Although the Company has a diversified loan portfolio, a substantial portion of the loan portfolio and credit performance depends on the economic stability of Southern California. Credit performance also depends, to a lesser extent, on economic conditions in the San Francisco Bay area and New York.

Within the Company’s covered loan portfolio at March 31, 2015, the five states with the largest concentration were California (32 percent), Texas (12 percent), Nevada (6 percent), Arizona (6 percent) and Ohio (6 percent). The remaining 38 percent of total covered loans outstanding represented other states.

24

Note 5. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Continued)

Covered Loans

Covered loans represent loans acquired from the FDIC that are subject to loss-sharing agreements. Covered loans were $480.2 million at March 31, 2015 and $511.0 million at December 31, 2014. Covered loans, net of allowance for loan losses, were $470.5 million at March 31, 2015 and $502.4 million at December 31, 2014.

The following is a summary of the major categories of covered loans:

	March 31,			December 31,
(in thousands)	2015			2014
Commercial	$	2,153		$	1,969
Commercial real estate mortgages	453,647			481,689
Residential mortgages	3,715			4,455
Real estate construction	16,813			18,790
Home equity loans and lines of credit	3,655			3,820
Installment	253			256
Covered loans	480,236			510,979
Less: Allowance for loan losses	(9,752		)	(8,608		)
Covered loans, net	$	470,484		$	502,371

The following table provides information on covered loans and loss-sharing terms by acquired entity:

(in thousands)	Imperial Capital Bank		1st Pacific Bank		Sun West Bank		Nevada Commerce Bank		Total
Carrying value of covered loans as of:
March 31, 2015	$	429,570	$	22,787	$	8,497	$	19,382	$	480,236
December 31, 2014	456,177		23,895		9,353		21,554		510,979
As of March 31, 2015:
FDIC indemnification asset	$	38,935	$	1,596	$	276	$	2,449	$	43,256
FDIC clawback liability	—		13,159		2,599		205		15,963
Expiration date of FDIC loss sharing:
Commercial (1)	12/31/2016		6/30/2015		6/30/2015		6/30/2016
Residential	12/31/2019		5/31/2020		5/31/2020		4/30/2021
Termination date of FDIC loss-sharing agreements:
Commercial (1)	12/19/2017		5/8/2018		5/29/2018		6/30/2019
Residential	12/31/2019		5/31/2020		5/31/2020		4/30/2021

(1)The Company is subject to sharing 80 percent of its recoveries with the FDIC up to the last day of the quarter in which the termination dates of the commercial loss-sharing agreements occur.

The Company evaluated the acquired loans from its FDIC-assisted acquisitions and concluded that all loans, with the exception of a small population of acquired loans, would be accounted for under Accounting Standards Codification (“ASC”) Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“ASC 310-30”). Loans are accounted for under ASC 310-30 when there is evidence of credit deterioration since origination and for which it is probable, at acquisition, that the Company would be unable to collect all contractually required payments. Interest income is recognized on all acquired impaired loans through accretion of the difference between the carrying amount of the loans and their expected cash flows.

25

Note 5. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Continued)

The excess of cash flows expected to be collected over the carrying value of the underlying acquired impaired loans is referred to as the accretable yield. This amount is not reported in the consolidated balance sheets but is accreted into interest income over the remaining estimated lives of the underlying pools of loans. Changes in the accretable yield for acquired impaired loans were as follows for the three months ended March 31, 2015 and 2014:

	For the three months ended March 31,
(in thousands)	2015			2014
Balance, beginning of period	$	168,469		$	219,018
Accretion	(9,876		)	(12,528		)
Reclassifications from nonaccretable difference	4,816			4,305
Disposals and other	(8,853		)	(8,704		)
Balance, end of period	$	154,556		$	202,091

The factors that most significantly affect estimates of cash flows expected to be collected, and accordingly the accretable yield balance, include: (i) changes in credit assumptions, including both credit loss amounts and timing; (ii) changes in prepayment assumptions; and (iii) changes in interest rates for variable-rate loans. Reclassifications between accretable yield and nonaccretable difference may vary from period to period as the Company periodically updates its cash flow projections. The reclassification of nonaccretable difference to accretable yield during 2015 was principally driven by positive changes in cash flows, resulting mainly from changes in credit assumptions.

The Company recorded an indemnification asset related to its FDIC-assisted acquisitions, which represents the present value of the expected reimbursement from the FDIC for expected losses on acquired loans, OREO and unfunded commitments. The difference between the carrying value of the FDIC indemnification asset and the undiscounted cash flow that the Company expects to collect from the FDIC is accreted or amortized into noninterest income up until the expiration date of the FDIC loss sharing. Refer to the preceding table for a list of expiration dates of FDIC loss sharing by acquired entity. The FDIC indemnification asset is reviewed on a quarterly basis and adjusted based on changes in cash flow projections. The FDIC indemnification asset from all FDIC-assisted acquisitions was $43.3 million at March 31, 2015 and $50.5 million at December 31, 2014.

Credit Quality on Loans and Leases, Excluding Covered Loans

Allowance for Loan and Lease Losses and Reserve for Off-Balance Sheet Credit Commitments

The Company accounts for the credit risk associated with lending activities through its allowance for loan and lease losses, reserve for off-balance sheet credit commitments and provision for credit losses. The provision is the expense recognized in the consolidated statements of income to adjust the allowance and reserve to the levels deemed appropriate by management, as determined through application of the Company’s allowance methodology. The provision for credit losses reflects management’s judgment of the adequacy of the allowance for loan and lease losses and the reserve for off-balance sheet credit commitments. It is determined through quarterly analytical reviews of the loan and commitment portfolios and consideration of such other factors as the Company’s loan and lease loss experience, trends in problem loans, concentrations of credit risk, underlying collateral values, and current economic conditions, as well as the results of the Company’s ongoing credit review process. As conditions change, the Company’s level of provisioning and the allowance for loan and lease losses and reserve for off-balance sheet credit commitments may change.

The relative significance of risk considerations used in measuring the allowance for loan and lease losses will vary by portfolio segment. For commercial loans, the primary risk consideration is a borrower’s ability to generate sufficient cash flows to repay their loan. Secondary considerations include the creditworthiness of guarantors and the valuation of collateral. In addition to the creditworthiness of a borrower, the type and location of real estate collateral is an important risk factor for commercial real estate and real estate construction loans. The primary risk considerations for consumer loans are a borrower’s personal cash flow and liquidity, as well as collateral value.

26

Note 5. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Continued)

For commercial, non-homogenous loans that are not impaired, the Company derives loss factors for each risk grade and loan type via a process that begins with estimates of probable losses inherent in the portfolio based upon various statistical analyses. The factors considered in the analysis include loan type, migration analysis, in which historical delinquency and credit loss experience is applied to the portfolio, as well as analyses that reflect current trends and conditions. Each portfolio of smaller balance homogeneous loans, including residential first mortgages, installment, revolving credit and most other consumer loans, is collectively evaluated for loss potential. The quantitative portion of the allowance for loan and lease losses is adjusted for qualitative factors to account for model imprecision and to incorporate the range of probable outcomes inherent in the estimates used for the allowance. The Company has a qualitative factor matrix to determine the amount of reserves needed for judgmental factors that are not attributable to or reflected in the quantitative model. The methodology to determine the qualitative reserves includes segmenting the Company’s portfolio into three loan categories: commercial real estate secured, commercial and consumer. The qualitative reserve factors are separated into numerically informed and judgmental categories. Numerically informed factors are linked to defined macroeconomic or bank specific criteria, such as portfolio growth, problem loan trends and concentrations. Judgmental factors are based on the Company’s assessment of factors that include, but are not limited to, the legal and regulatory environment, internal systems and procedures, and entry into a new business. Each factor is assigned a risk level and a risk weight in points which is aggregated to determine the level of qualitative reserves. The factors are updated quarterly to reflect changing conditions.

A portion of the allowance for loan and lease losses is attributed to impaired loans that are individually measured for impairment. This measurement is based on the present value of expected future cash flows discounted using the loan’s contractual effective rate, the fair value of collateral or the secondary market value of the loan.

The allowance for loan and lease losses is decreased by the amount of charge-offs and increased by the amount of recoveries. Generally, commercial, commercial real estate and real estate construction loans are charged off immediately when it is determined that advances to the borrower are in excess of the calculated current fair value of the collateral and if a borrower is deemed incapable of repayment of unsecured debt, there is little or no prospect for near term improvement and no realistic strengthening action of significance pending. Consumer loans are charged off based on delinquency, ranging from 60 days for overdrafts to 180 days for secured consumer loans, or earlier when it is determined that the loan is uncollectible due to a triggering event, such as bankruptcy, fraud or death.

27

Note 5. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Continued)

The following is a summary of activity in the allowance for loan and lease losses and period-end recorded investment balances of loans evaluated for impairment, excluding covered loans, for the three months ended March 31, 2015 and 2014. Activity is provided by loan portfolio segment which is consistent with the Company’s methodology for determining the allowance for loan and lease losses.

(in thousands)	Commercial (1)			Commercial Real Estate Mortgages			Residential Mortgages			Real Estate Construction			Home Equity Loans and Lines of Credit			Installment			Qualitative			Total
Three months ended March 31, 2015
Allowance for loan and lease losses:
Beginning balance	$	115,855		$	44,745		$	10,296		$	9,115		$	6,609		$	2,228		$	121,301		$	310,149
Charge-offs	(2,825		)	—			—			—			—			(277		)	—			(3,102		)
Recoveries	1,116			1,160			39			87			38			220			—			2,660
Net (charge-offs) recoveries	(1,709		)	1,160			39			87			38			(57		)	—			(442		)
(Reversal of) provision for credit losses	6,520			1,112			(368		)	1,032			(286		)	(18		)	(7,992		)	—
Transfers to reserve for off-balance sheet credit commitments	—			—			—			—			—			—			(849		)	(849		)
Ending balance	$	120,666		$	47,017		$	9,967		$	10,234		$	6,361		$	2,153		$	112,460		$	308,858
Ending balance of allowance:
Individually evaluated for impairment	$	471		$	273		$	40		$	—		$	—		$	—		$	—		$	784
Collectively evaluated for impairment	120,195			46,744			9,927			10,234			6,361			2,153			112,460			308,074
Loans and leases, excluding covered loans
Ending balance of loans and leases:
Loans and leases, excluding covered loans	$	10,101,190		$	3,737,137		$	5,299,947		$	794,274		$	791,731		$	186,076		$	—		$	20,910,355
Individually evaluated for impairment	7,600			22,879			11,655			8,979			935			—			—			52,048
Collectively evaluated for impairment	10,093,590			3,714,258			5,288,292			785,295			790,796			186,076			—			20,858,307
Three months ended March 31, 2014
Allowance for loan and lease losses:
Beginning balance	$	117,103		$	50,678		$	11,540		$	6,351		$	6,677		$	1,842		$	108,393		$	302,584
Charge-offs	(1,959		)	(5		)	(482		)	—			(16		)	(46		)	—			(2,508		)
Recoveries	1,732			100			35			4,388			159			264			—			6,678
Net (charge-offs) recoveries	(227		)	95			(447		)	4,388			143			218			—			4,170
(Reversal of) provision for credit losses	4,698			588			502			(4,271		)	(401		)	(236		)	(880		)	—
Transfers to reserve for off-balance sheet credit commitments	—			—			—			—			—			—			(964		)	(964		)
Ending balance	$	121,574		$	51,361		$	11,595		$	6,468		$	6,419		$	1,824		$	106,549		$	305,790
Ending balance of allowance:
Individually evaluated for impairment	$	2,557		$	300		$	—		$	—		$	—		$	—		$	—		$	2,857
Collectively evaluated for impairment	119,017			51,061			11,595			6,468			6,419			1,824			106,549			302,933
Loans and leases, excluding covered loans
Ending balance of loans and leases:
Loans and leases, excluding covered loans	$	8,557,041		$	3,280,868		$	4,682,055		$	389,188		$	691,338		$	150,895		$	—		$	17,751,385
Individually evaluated for impairment	28,683			41,924			7,904			18,788			3,447			—			—			100,746
Collectively evaluated for impairment	8,528,358			3,238,944			4,674,151			370,400			687,891			150,895			—			17,650,639

(1) Includes lease financing loans.

28

Note 5. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Continued)

Off-balance sheet credit exposures include loan commitments and letters of credit. The following table provides a summary of activity in the reserve for off-balance sheet credit commitments for the three months ended March 31, 2015 and 2014:

	For the three months ended March 31,
(in thousands)	2015		2014
Balance, beginning of period	$	27,811	$	33,944
Transfers from allowance for loan and lease losses	849		964
Balance, end of period	$	28,660	$	34,908

The reserve for off-balance sheet credit commitments increased $0.8 million during the three months ended March 31, 2015. The increase was due to normal fluctuations in the amount of reserves required due to changes in the composition, amount and quality of risk ratings of borrowers associated with the off-balance sheet commitments. Increases and decreases in the reserve for off-balance sheet credit commitments are reflected as an allocation of provision expense from or to the allowance for loan and lease losses.

Impaired Loans and Leases

The Company considers a loan to be impaired when it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan agreement. Once a loan is determined to be impaired, the impairment is measured based on the present value of the expected future cash flows discounted at the loan’s effective interest rate, except that if the loan is collateral dependent, the impairment is measured by using the fair value of the loan’s collateral. As a final alternative, the observable market price of the debt may be used to assess impairment. Nonperforming loans greater than $1 million are individually evaluated for impairment based upon the borrower’s overall financial condition, resources, and payment record, and the prospects for support from any financially responsible guarantors. For borrowers with multiple loans totaling $1 million or more, this threshold is applied at the total relationship level. Loans under $1 million are measured for impairment using historical loss factors. When the measurement of the impaired loan is less than the recorded amount of the loan, an impairment is recognized by creating a valuation allowance with a corresponding charge to the allowance for loan and lease losses or by adjusting an existing valuation allowance for the impaired loan.

29

Note 5. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Continued)

Information on impaired loans, excluding covered loans, at March 31, 2015, December 31, 2014 and March 31, 2014 is provided in the following tables:

			Unpaid				For the three months ended March 31, 2015
(in thousands)	Recorded Investment		Contractual Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
March 31, 2015
With no related allowance recorded:
Commercial	$	1,449	$	1,637	$	—	$	5,172	$	5
Commercial real estate mortgages	17,838		18,762		—		18,848		208
Residential mortgages:
Fixed	7,720		7,980		—		7,738		10
Variable	—		—		—		112		—
Total residential mortgages	7,720		7,980		—		7,850		10
Real estate construction:
Land	8,979		11,119		—		7,794		62
Total real estate construction	8,979		11,119		—		7,794		62
Home equity loans and lines of credit	935		2,043		—		1,602		—
Total with no related allowance	$	36,921	$	41,541	$	—	$	41,266	$	285
With an allowance recorded:
Commercial	$	6,151	$	11,425	$	471	$	6,310	$	17
Commercial real estate mortgages	5,041		5,375		273		5,113		71
Residential mortgages:
Variable	3,935		3,926		40		3,946		26
Total residential mortgages	3,935		3,926		40		3,946		26
Total with an allowance	$	15,127	$	20,726	$	784	$	15,369	$	114
Total impaired loans by type:
Commercial	$	7,600	$	13,062	$	471	$	11,482	$	22
Commercial real estate mortgages	22,879		24,137		273		23,961		279
Residential mortgages	11,655		11,906		40		11,796		36
Real estate construction	8,979		11,119		—		7,794		62
Home equity loans and lines of credit	935		2,043		—		1,602		—
Total impaired loans	$	52,048	$	62,267	$	784	$	56,635	$	399

30

Note 5. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Continued)

(in thousands)	Recorded Investment		Unpaid Contractual Principal Balance		Related Allowance
December 31, 2014
With no related allowance recorded:
Commercial	$	8,894	$	9,182	$	—
Commercial real estate mortgages	19,858		22,416		—
Residential mortgages:
Fixed	7,756		7,994		—
Variable	224		262		—
Total residential mortgages	7,980		8,256		—
Real estate construction:
Land	6,609		8,758		—
Total real estate construction	6,609		8,758		—
Home equity loans and lines of credit	2,270		3,375		—
Total with no related allowance	$	45,611	$	51,987	$	—
With an allowance recorded:
Commercial	$	6,470	$	8,878	$	399
Commercial real estate mortgages	5,184		5,526		281
Residential mortgages:
Variable	3,957		3,948		48
Total residential mortgages	3,957		3,948		48
Total with an allowance	$	15,611	$	18,352	$	728
Total impaired loans by type:
Commercial	$	15,364	$	18,060	$	399
Commercial real estate mortgages	25,042		27,942		281
Residential mortgages	11,937		12,204		48
Real estate construction	6,609		8,758		—
Home equity loans and lines of credit	2,270		3,375		—
Total impaired loans	$	61,222	$	70,339	$	728

31

Note 5. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Continued)

			Unpaid				For the three months ended March 31, 2014
(in thousands)	Recorded Investment		Contractual Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
March 31, 2014
With no related allowance recorded:
Commercial	$	11,257	$	11,920	$	—	$	14,489	$	137
Commercial real estate mortgages	36,562		39,660		—		34,666		438
Residential mortgages:
Fixed	4,888		5,051		—		3,512		10
Variable	3,016		3,618		—		4,209		14
Total residential mortgages	7,904		8,669		—		7,721		24
Real estate construction:
Construction	5,484		6,766		—		5,484		55
Land	13,304		26,800		—		13,458		34
Total real estate construction	18,788		33,566		—		18,942		89
Home equity loans and lines of credit	3,447		4,505		—		2,888		—
Installment:
Consumer	—		—		—		8		—
Total installment	—		—		—		8		—
Total with no related allowance	$	77,958	$	98,320	$	—	$	78,714	$	688
With an allowance recorded:
Commercial	$	17,426	$	19,663	$	2,557	$	15,781	$	—
Commercial real estate mortgages	5,362		5,734		300		5,373		44
Residential mortgages:
Variable	—		—		—		837		—
Total residential mortgages	—		—		—		837		—
Total with an allowance	$	22,788	$	25,397	$	2,857	$	21,991	$	44
Total impaired loans by type:
Commercial	$	28,683	$	31,583	$	2,557	$	30,270	$	137
Commercial real estate mortgages	41,924		45,394		300		40,039		482
Residential mortgages	7,904		8,669		—		8,558		24
Real estate construction	18,788		33,566		—		18,942		89
Home equity loans and lines of credit	3,447		4,505		—		2,888		—
Installment	—		—		—		8		—
Total impaired loans	$	100,746	$	123,717	$	2,857	$	100,705	$	732

Impaired loans at March 31, 2015 and December 31, 2014 included $28.9 million and $30.6 million, respectively, of loans that are on accrual status. With the exception of restructured loans on accrual status and a limited number of loans on cash basis nonaccrual for which the full collection of principal and interest is expected, interest income is not recognized on impaired loans until the principal balance of these loans is paid off.

32

Note 5. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Continued)

Troubled Debt Restructured Loans

The following table provides a summary of loans modified in a troubled debt restructuring during the three months ended March 31, 2015 and 2014:

(in thousands)	Number of Contracts	Pre-Modification Outstanding Principal		Period-End Outstanding Principal		Financial Effects (1)
Three months ended March 31, 2015
Home equity loans and lines of credit	1	$	87	$	85	$	—
Total troubled debt restructured loans	1	$	87	$	85	$	—
Three months ended March 31, 2014
Commercial	2	$	4,098	$	4,071	$	—
Residential mortgages:
Variable	1	676		676		—
Total troubled debt restructured loans	3	$	4,774	$	4,747	$	—

(1)   Financial effects are comprised of charge-offs and specific reserves recognized on troubled debt restructured (“TDR”) loans at modification date.

A restructuring constitutes a troubled debt restructuring when a lender, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. Loans with pre-modification outstanding balances totaling $0.1 million and $4.8 million were modified in troubled debt restructurings during the three months ended March 31, 2015 and 2014, respectively.

The unpaid principal balance of TDR loans was $30.0 million, before specific reserves of $0.8 million, at March 31, 2015 and $34.3 million, before specific reserves of $0.7 million, at December 31, 2014. The net decrease in TDR loans from December 31, 2014 was primarily attributable to a $2.6 million charge-off on an existing TDR loan and payoffs and payments received on existing TDR loans totaling $1.8 million. These decreases were partially offset by additions totaling $0.1 million. Loans modified in troubled debt restructurings are impaired loans at the time of restructuring and subject to the same measurement criteria as all other impaired loans.

The following table provides a summary of TDR loans that subsequently defaulted during the three months ended March 31, 2015 that had been modified as a troubled debt restructuring during the 12 months prior to their default. A TDR loan is considered to be in default when payments are 90 days or more past due. The Company had no TDR loans that subsequently defaulted during the three months ended March 31, 2014.

	For three months ended March 31, 2015
(in thousands)	Number of Contracts	Period-End Outstanding Principal		Period-End Specific Reserve
Commercial real estate mortgages	1	$	73	$	—

All other TDR loans were performing in accordance with their restructured terms at March 31, 2015. As of March 31, 2015, there were no outstanding commitments to lend additional funds on restructured loans.

33

Note 5. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Continued)

Past Due and Nonaccrual Loans and Leases

Loans are considered past due following the date when either interest or principal is contractually due and unpaid. The following tables provide a summary of past due and nonaccrual loans, excluding covered loans, at March 31, 2015 and December 31, 2014 based upon the length of time the loans have been past due:

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and Accruing		Nonaccrual		Total Past Due and Nonaccrual Loans		Current		Total Loans and Leases
March 31, 2015
Commercial	$	4,130	$	5,586	$	—	$	8,192	$	17,908	$	9,437,713	$	9,455,621
Commercial real estate mortgages	185		—		—		2,901		3,086		3,734,051		3,737,137
Residential mortgages:
Fixed	—		618		379		10,793		11,790		1,466,330		1,478,120
Variable	—		3,985		—		1,339		5,324		3,816,503		3,821,827
Total residential mortgages	—		4,603		379		12,132		17,114		5,282,833		5,299,947
Real estate construction:
Construction	—		—		—		—		—		766,840		766,840
Land	—		—		—		6,598		6,598		20,836		27,434
Total real estate construction	—		—		—		6,598		6,598		787,676		794,274
Home equity loans and lines of credit	—		350		240		3,507		4,097		787,634		791,731
Installment:
Commercial	—		—		—		—		—		249		249
Consumer	206		52		409		39		706		185,121		185,827
Total installment	206		52		409		39		706		185,370		186,076
Lease financing	703		—		—		7		710		644,859		645,569
Total	$	5,224	$	10,591	$	1,028	$	33,376	$	50,219	$	20,860,136	$	20,910,355
December 31, 2014
Commercial	$	8,462	$	325	$	148	$	15,096	$	24,031	$	9,336,945	$	9,360,976
Commercial real estate mortgages	693		—		—		3,575		4,268		3,535,435		3,539,703
Residential mortgages:
Fixed	—		309		921		10,365		11,595		1,390,357		1,401,952
Variable	—		1,165		—		1,578		2,743		3,702,108		3,704,851
Total residential mortgages	—		1,474		921		11,943		14,338		5,092,465		5,106,803
Real estate construction:
Construction	—		—		—		—		—		686,990		686,990
Land	—		—		—		6,598		6,598		16,636		23,234
Total real estate construction	—		—		—		6,598		6,598		703,626		710,224
Home equity loans and lines of credit	—		39		100		4,864		5,003		780,793		785,796
Installment:
Commercial	—		—		—		—		—		298		298
Consumer	324		113		346		84		867		183,448		184,315
Total installment	324		113		346		84		867		183,746		184,613
Lease financing	321		152		—		7		480		648,611		649,091
Total	$	9,800	$	2,103	$	1,515	$	42,167	$	55,585	$	20,281,621	$	20,337,206

34

Note 5. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Continued)

Credit Quality Monitoring

The Company closely monitors and assesses credit quality and credit risk in the loan and lease portfolio on an ongoing basis. Loan risk classifications are continuously reviewed and updated. The following table provides a summary of the loan and lease portfolio, excluding covered loans, by loan type and credit quality classification as of March 31, 2015 and December 31, 2014. Nonclassified loans generally include those loans that are expected to be repaid in accordance with contractual loan terms. Classified loans are those loans that are classified as substandard or doubtful consistent with regulatory guidelines.

	March 31, 2015						December 31, 2014
(in thousands)	Nonclassified		Classified		Total		Nonclassified		Classified		Total
Commercial	$	9,383,150	$	72,471	$	9,455,621	$	9,304,636	$	56,340	$	9,360,976
Commercial real estate mortgages	3,697,901		39,236		3,737,137		3,511,229		28,474		3,539,703
Residential mortgages:
Fixed	1,456,060		22,060		1,478,120		1,375,175		26,777		1,401,952
Variable	3,792,414		29,413		3,821,827		3,675,723		29,128		3,704,851
Total residential mortgages	5,248,474		51,473		5,299,947		5,050,898		55,905		5,106,803
Real estate construction:
Construction	763,016		3,824		766,840		679,744		7,246		686,990
Land	18,475		8,959		27,434		16,636		6,598		23,234
Total real estate construction	781,491		12,783		794,274		696,380		13,844		710,224
Home equity loans and lines of credit	763,760		27,971		791,731		754,694		31,102		785,796
Installment:
Commercial	249		—		249		298		—		298
Consumer	185,152		675		185,827		183,190		1,125		184,315
Total installment	185,401		675		186,076		183,488		1,125		184,613
Lease financing	641,343		4,226		645,569		645,049		4,042		649,091
Total	$	20,701,520	$	208,835	$	20,910,355	$	20,146,374	$	190,832	$	20,337,206

Credit Quality on Covered Loans

The following is a summary of activity in the allowance for losses on covered loans:

	For the three months ended March 31,
(in thousands)	2015		2014
Balance, beginning of period	$	8,608	$	15,922
Provision for losses	497		4,655
Change in allowance due to loan removals	647		(2,138		)
Balance, end of period	$	9,752	$	18,439

The allowance for losses on covered loans was $9.8 million, $8.6 million and $18.4 million as of March 31, 2015, December 31, 2014 and March 31, 2014, respectively. The Company recorded provision expense of $0.5 million and $4.7 million during the three months ended March 31, 2015 and 2014, respectively. The Company updates its cash flow projections for covered loans accounted for under ASC 310-30 on a quarterly basis, and may recognize provision expense or reversal of provision for loan losses as a result of that analysis. The provision expense or reversal of provision for losses on covered loans is the result of changes in expected cash flows, both amount and timing, due to actual loan performance and the Company’s revised loan loss and prepayment forecasts. The revisions of these forecasts were based on the results of management’s review of market conditions, the credit quality of outstanding covered loans and the analysis of loan performance data since the acquisition of covered loans. The allowance for losses on covered loans is adjusted for any loan removals, which occur when a loan has been fully paid off, fully charged off, sold or transferred to OREO.

35

Note 5. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Continued)

Covered loans accounted for under ASC 310-30 are generally considered accruing and performing loans as the loans accrete interest income over the estimated life of the loan when cash flows are reasonably estimable. Accordingly, acquired impaired loans that are contractually past due are still considered to be accruing and performing loans. If the timing and amount of future cash flows is not reasonably estimable, the loans may be classified as nonaccrual loans and interest income is not recognized until the timing and amount of future cash flows can be reasonably estimated. There were no covered loans that were on nonaccrual status as of March 31, 2015 and December 31, 2014.

At March 31, 2015, covered loans that were 30 to 89 days delinquent totaled $12.5 million and covered loans that were 90 days or more past due on accrual status totaled $22.1 million. At December 31, 2014, covered loans that were 30 to 89 days delinquent totaled $7.4 million and covered loans that were 90 days or more past due on accrual status totaled $28.3 million.

Note 6. Other Real Estate Owned

The following table provides a summary of OREO activity for the three months ended March 31, 2015 and 2014:

	For the three months ended March 31, 2015									For the three months ended March 31, 2014
(in thousands)	Non-Covered OREO			Covered OREO			Total			Non-Covered OREO			Covered OREO			Total
Balance, beginning of period	$	10,736		$	12,760		$	23,496		$	12,611		$	25,481		$	38,092
Additions	—			1,085			1,085			—			2,033			2,033
Sales	(4,779		)	(631		)	(5,410		)	(3,186		)	(2,504		)	(5,690		)
Valuation adjustments	—			(1,662		)	(1,662		)	(13		)	(155		)	(168		)
Balance, end of period	$	5,957		$	11,552		$	17,509		$	9,412		$	24,855		$	34,267

At March 31, 2015, OREO was $17.5 million and included $11.6 million of covered OREO. At December 31, 2014, OREO was $23.5 million and included $12.8 million of covered OREO. The balance of OREO at March 31, 2015 and December 31, 2014 is net of valuation allowances of $4.1 million and $7.4 million, respectively. At March 31, 2015, the Company’s recorded investment in residential mortgage loans, excluding covered loans, for which foreclosure proceedings had been initiated totaled $6.9 million.

Covered OREO expenses and valuation write-downs are recorded in the noninterest expense section of the consolidated statements of income and gains or losses on sale of covered OREO are recognized in the noninterest income section. Under the loss-sharing agreements, 80 percent of eligible covered OREO expenses, valuation write-downs, and losses on sales are reimbursable to the Company from the FDIC, and 80 percent of covered gains on sales are payable to the FDIC. The portion of these expenses and income shared with the FDIC is recorded in FDIC loss sharing income (expense), net in the noninterest income section of the consolidated statements of income.

36

Note 7. Borrowed Funds

Short-term borrowings consist of funds with remaining maturities of one year or less, and long-term debt consists of borrowings with remaining maturities greater than one year. The components of short-term borrowings and long-term debt as of March 31, 2015 and December 31, 2014 are provided below:

	March 31,		December 31,
(in thousands) (1)	2015		2014
Short-term borrowings
Federal funds purchased	$	—	$	320,000
Current portion of nonrecourse debt (2)	4,400		2,861
Total short-term borrowings	$	4,400	$	322,861
Long-term debt
Senior notes:
City National Corporation - 5.25% Senior Notes Due September 2020	$	299,559	$	299,540
Subordinated debt:
City National Bank - 9.00% Subordinated Notes Due August 2019	75,000		75,000
City National Bank - 5.375% Subordinated Notes Due July 2022	149,995		149,994
Junior subordinated debt:
Floating Rate Business Bancorp Capital Trust I Securities due November 2034 (3)	5,155		5,155
Nonrecourse debt (2)	94,997		99,139
Other long-term debt (4)	9,719		9,772
Total long-term debt	$	634,425	$	638,600

(1) The carrying value of certain borrowed funds is net of discount which is being amortized into interest expense.

(2) Nonrecourse debt bears interest at an average rate of 3.88 percent as of March 31, 2015 and has maturity dates ranging from June 2015 to February 2023.

(3) These floating rate securities bear interest of three-month LIBOR plus 1.965 percent which is reset quarterly.  As of
March 31, 2015, the interest rate was approximately 2.23 percent.

(4) Other long-term debt includes a note payable that bears a fixed interest rate of 5.64 percent and is scheduled to mature in
June 2017.

The Company holds debt affiliated with First American Equipment Finance (“FAEF”), its wholly-owned equipment finance subsidiary. FAEF assigns the future rentals of certain lease financing loans to financial institutions on a nonrecourse basis at fixed interest rates. In return for future minimum lease rentals assigned, FAEF receives a discounted cash payment. Proceeds from discounting are reflected in the table above as nonrecourse debt.

Note 8. Shareholders’ Equity

The components of AOCI at March 31, 2015 and December 31, 2014 are as follows:

(in thousands)	March 31, 2015			December 31, 2014
Net unrealized gain (loss) on securities available-for-sale	$	5,045		$	(7,070	)
Foreign currency translation adjustments	(14		)	(4		)
Total accumulated other comprehensive income (loss)	$	5,031		$	(7,074	)

37

Note 8. Shareholders’ Equity (Continued)

The following table presents the tax effects allocated to each component of other comprehensive income (loss) for the three months ended March 31, 2015 and 2014:

	For the three months ended March 31, 2015									For the three months ended March 31, 2014
(in thousands)	Pre-tax			Tax expense (benefit)			Net-of-tax			Pre-tax			Tax expense (benefit)			Net-of-tax
Securities available-for-sale:
Net unrealized gains arising during the period	$	24,477		$	10,260		$	14,217		$	21,528		$	8,975		$	12,553
Reclassification adjustment for net gains included in net income (1)	(3,386		)	(1,417		)	(1,969		)	(2,192		)	(917		)	(1,275		)
Non-credit related impairment loss	(228		)	(95		)	(133		)	—			—			—
Total securities available-for-sale	20,863			8,748			12,115			19,336			8,058			11,278
Foreign currency translation adjustments	(10		)	—			(10		)	—			—			—
Total other comprehensive income	$	20,853		$	8,748		$	12,105		$	19,336		$	8,058		$	11,278

(1) Recognized in Gain on sale of securities in the consolidated statements of income.

The following table summarizes the Company’s share repurchases for the three months ended March 31, 2015. All repurchases relate to shares withheld or previously owned shares used to pay taxes due upon vesting of restricted stock. There were no issuer repurchases of the Corporation’s common stock as part of its repurchase plan for the three months ended March 31, 2015.

Period	Total Number of Shares Purchased	Average Price Paid per Share
January 1, 2015 to January 31, 2015	294	$	82.64
February 1, 2015 to February 28, 2015	28,854	89.91
March 1, 2015 to March 31, 2015	3,999	89.88
Total share repurchases	33,147	89.84

Note 9. Earnings per Common Share

The Company applies the two-class method of computing basic and diluted earnings per common share (“EPS”). Under the two-class method, EPS is determined for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The Company grants restricted stock and restricted stock units under a share-based compensation plan that qualify as participating securities.

38

Note 9. Earnings per Common Share (Continued)

The computation of basic and diluted EPS is presented in the following table:

	For the three months ended March 31,
(in thousands, except per share amounts) (1)	2015		2014
Basic EPS:
Net income attributable to City National Corporation	$	61,566	$	53,830
Less: Dividends on preferred stock	4,094		4,094
Net income available to common shareholders	$	57,472	$	49,736
Less: Earnings allocated to participating securities	529		536
Earnings allocated to common shareholders	$	56,943	$	49,200
Weighted-average common shares outstanding	55,422		54,689
Basic earnings per common share	$	1.03	$	0.90
Diluted EPS:
Earnings allocated to common shareholders (2)	$	56,948	$	49,204
Weighted-average common shares outstanding	55,422		54,689
Dilutive effect of equity awards	884		740
Weighted-average diluted common shares outstanding	56,306		55,429
Diluted earnings per common share	$	1.01	$	0.89

(1) Certain prior period amounts have been adjusted to reflect the adoption of ASU 2014-01. See Note 1, Summary of Significant Accounting Policies, for further discussion.

(2) Earnings allocated to common shareholders for basic and diluted EPS may differ under the two-class method as a result of adding common stock equivalents for options to dilutive shares outstanding, which alters the ratio used to allocate earnings to common shareholders and participating securities for the purposes of calculating diluted EPS.

The average price of the Company’s common stock for the period is used to determine the dilutive effect of outstanding stock options. Antidilutive stock options are not included in the calculation of diluted EPS. There were 0.2 million and 0.4 million average outstanding stock options that were antidilutive for the three months ended March 31, 2015 and 2014, respectively.

Note 10. Share-Based Compensation

On March 31, 2015, the Company had one share-based compensation plan, the Amended and Restated City National Corporation 2008 Omnibus Plan (the “Plan”), which was originally approved by the Company’s shareholders on April 23, 2008. No new awards have been or will be granted under predecessor plans since the adoption of the Plan. The Plan permits the grant of stock options, restricted stock, restricted stock units, cash-settled restricted stock units, performance shares, performance share units, performance units and stock appreciation rights, or any combination thereof, to the Company’s eligible employees and non-employee directors. No grants of performance shares, performance share units or stock appreciation rights had been made as of March 31, 2015. At March 31, 2015, there were approximately 2.4 million shares available for future grants. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 for further discussion of the Company’s share-based compensation plan.

The compensation cost that has been recognized for all share-based awards was $6.2 million and $5.4 million for the three months ended March 31, 2015 and 2014, respectively. The total income tax benefit recognized in the consolidated statements of income for share-based compensation arrangements was $2.6 million and $2.3 million for the three months ended March 31, 2015 and 2014, respectively. The Company received $21.3 million and $13.2 million in cash for the exercise of stock options during the three months ended March 31, 2015 and 2014, respectively. The actual tax benefit realized for the tax deductions from stock option exercises was $3.4 million and $1.7 million for the three months ended March 31, 2015 and 2014, respectively.

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Note 10. Share-Based Compensation (Continued)

To estimate the fair value of stock option awards, the Company uses the Black-Scholes methodology, which incorporates the assumptions summarized in the table below:

	For the three months ended March 31,
	2015		2014
Weighted-average volatility	26.66	%	27.35	%
Dividend yield	1.55	%	1.79	%
Expected term (in years)	6.06		6.07
Risk-free interest rate	1.78	%	1.99	%

Using the Black-Scholes methodology, the weighted-average grant-date fair values of options granted during the three months ended March 31, 2015 and 2014 were $21.80 and $17.94, respectively. The total intrinsic value of options exercised during the three months ended March 31, 2015 and 2014 was $8.2 million and $4.0 million, respectively.

A summary of option activity and related information for the three months ended March 31, 2015 is presented below:

			Weighted				Weighted
			Average		Aggregate		Average
	Number of		Exercise		Intrinsic		Remaining
	Shares		Price		Value		Contractual
Options	(in thousands)		(per share)		(in thousands) (1)		Term
Outstanding at January 1, 2015	3,971		$	57.40
Granted	374		90.46
Exercised	(332	)	64.25
Forfeited or expired	(10	)	66.36
Outstanding at March 31, 2015	4,003		$	59.90	$	117,325	5.77
Exercisable at March 31, 2015	2,850		$	55.34	$	96,155	4.58

(1) Includes in-the-money options only.

A summary of changes in unvested options and related information for the three months ended March 31, 2015 is presented below:

			Weighted Average
	Number of		Grant Date
	Shares		Fair Value
Unvested Options	(in thousands)		(per share)
Unvested at January 1, 2015	1,269		$	14.80
Granted	374		21.80
Vested	(488	)	14.82
Forfeited	(2	)	13.17
Unvested at March 31, 2015	1,153		$	17.07

The number of options vested during the three months ended March 31, 2015 and 2014 was 487,678 and 517,130, respectively. The total fair value of options vested during the three months ended March 31, 2015 and 2014 was $7.2 million and $7.5 million, respectively. As of March 31, 2015, there was $16.5 million of unrecognized compensation cost related to unvested stock options granted under the Company’s plans. That cost is expected to be recognized over a weighted-average period of 3.0 years.

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Note 10. Share-Based Compensation (Continued)

A summary of changes in restricted stock and related information for the three months ended March 31, 2015 is presented below:

			Weighted Average
	Number of		Grant Date
	Shares		Fair Value
Restricted Stock (1)	(in thousands)		(per share)
Unvested at January 1, 2015	525		$	60.60
Granted	99		90.46
Vested	(130	)	54.97
Forfeited	(1	)	58.22
Unvested at March 31, 2015	493		$	68.09

(1) Includes restricted stock units.

Restricted stock is valued at the closing price of the Company’s stock on the date of award. The weighted-average grant-date fair value of restricted stock granted during the three months ended March 31, 2015 and 2014 was $90.46 and $73.63, respectively. The number of restricted shares vested during the three months ended March 31, 2015 and 2014 was 130,406 and 164,938, respectively. The total fair value of restricted stock vested was $7.2 million during the three months ended March 31, 2015 and 2014. As of March 31, 2015, the unrecognized compensation cost related to restricted stock granted under the Company’s plans was $19.9 million. That cost is expected to be recognized over a weighted-average period of 3.5 years.

Cash-settled restricted stock units are initially valued at the closing price of the Company’s stock on the date of award. They are subsequently remeasured to the closing price of the Company’s stock at each reporting date until settlement. A summary of changes in cash-settled restricted stock units for the three months ended March 31, 2015 is presented below:

	Number of
	Shares
Cash-Settled Restricted Stock Units	(in thousands)
Unvested at January 1, 2015	174
Granted	14
Vested	(43	)
Forfeited	(1	)
Unvested at March 31, 2015	144

Note 11. Derivative Instruments

The Company may use interest-rate swaps to mitigate interest-rate risk associated with changes to (1) the fair value of certain fixed-rate deposits and borrowings (fair value hedges) and (2) certain cash flows related to future interest payments on variable rate loans (cash flow hedges). Interest-rate swap agreements involve the exchange of fixed and variable rate interest payments between counterparties based upon a notional principal amount and maturity date. The Company recognizes derivatives as assets or liabilities on the consolidated balance sheets at their fair value. The treatment of changes in the fair value of derivatives depends on the character of the transaction. The Company also offers various derivative products to clients and enters into derivative transactions in due course. These transactions are not linked to specific Company assets or liabilities in the consolidated balance sheets or to forecasted transactions in a hedge relationship and, therefore, do not qualify for hedge accounting.

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Note 11. Derivative Instruments (Continued)

The following table summarizes the fair value and balance sheet classification of derivative instruments as of March 31, 2015 and December 31, 2014. The notional amount of the contract is not recorded on the consolidated balance sheets, but is used as the basis for determining the amount of interest payments to be exchanged between the counterparties. If a counterparty fails to perform, the Company’s counterparty credit risk is equal to the amount reported as a derivative asset.

Notional Amounts and Fair Values of Derivative Instruments

	March 31, 2015						December 31, 2014
(in millions) (1)	Notional Amount		Derivative Assets		Derivative Liabilities		Notional Amount		Derivative Assets		Derivative Liabilities
Derivatives not designated as hedging instruments
Interest rate contracts:
Swaps	$	3,221.1	$	59.8	$	61.0	$	3,094.5	$	44.7	$	45.2
Interest-rate caps, floors and collars	438.9		0.4		0.4		437.3		0.8		0.8
Total interest-rate contracts	3,660.0		60.2		61.4		3,531.8		45.5		46.0
Option contracts	1.8		0.3		—		1.9		0.4		—
Foreign exchange contracts:
Spot and forward contracts	866.2		15.1		15.7		802.7		6.1		6.6
Options purchased	3.0		0.1		0.1		3.0		0.1		0.1
Options written	3.0		0.2		0.2		3.0		0.2		0.2
Total foreign exchange contracts	872.2		15.4		16.0		808.7		6.4		6.9
Equity warrants	3.2		1.2		—		2.3		0.9		—
Total derivatives not designated as hedging instruments	$	4,537.2	$	77.1	$	77.4	$	4,344.7	$	53.2	$	52.9

(1) The Company offsets mark-to-market adjustments, interest receivable, interest payable and cash collateral received on interest-rate swaps that are executed with the same counterparty under a master netting agreement, and reports the net balance in other assets or other liabilities in the consolidated balance sheets. For purposes of this disclosure, mark-to-market adjustments, interest receivable and interest payable are presented on a gross basis and cash collateral is excluded from fair value amounts.

Derivatives Designated as Hedging Instruments

The Company had no hedging instruments as of March 31, 2015 and December 31, 2014.

Derivatives Not Designated as Hedging Instruments

Derivative contracts not designated as hedges are composed primarily of interest-rate contracts with certain commercial clients that are largely offset by paired trades with unrelated bank counterparties. The Company also enters into foreign exchange contracts with its clients and counterparty banks primarily for the purpose of offsetting or hedging the clients’ transaction and economic exposures arising out of commercial transactions. The Company also obtains equity warrants in association with certain lending transactions. Derivative contracts not designated as hedges are carried at fair value each reporting period with changes in fair value recorded as a part of Noninterest income in the consolidated statements of income. The table below provides the amount of gains and losses on these derivative contracts for the three months ended March 31, 2015 and 2014:

(in millions)		For the three months ended
Derivatives Not Designated as	Location in Consolidated	March 31,
Hedging Instruments	Statements of Income	2015			2014
Interest-rate contracts	Other noninterest income	$	(0.7	)	$	(0.5	)
Option contracts	Other noninterest income	(0.1		)	0.1
Foreign exchange contracts (1)	International services income	7.5			7.2
Total income		$	6.7		$	6.8

(1)  Includes spread and translation gains (losses) on foreign exchange spot, forward and option contracts.

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Note 11. Derivative Instruments (Continued)

In the course of negotiating credit facilities, the Company may obtain rights to acquire stock in the form of equity warrants in primarily private, venture-backed technology companies. The warrants grant the Company an option to purchase a specific number of shares of stock in the underlying company at a specific price within a specific time period. The warrant agreements typically contain a net share settlement provision (cashless exercise) which gives the Company the option to receive at exercise a number of shares equal to the intrinsic value of the warrant divided by the share price. Equity warrants are accounted for as derivatives under ASC Topic 815, Derivatives and Hedging, and are recorded as derivative assets at their estimated fair value on the grant date. The warrant portfolio is reviewed quarterly for changes in fair value. Subsequent changes in the fair value of warrants are recognized in Other noninterest income in the consolidated statements of income. If a warrant is exercised or paid out for cash, the gain is recorded in Other noninterest income in the consolidated statements of income.

Credit Risk Exposure and Collateral

The Company’s swap agreements require the deposit of cash or marketable debt securities as collateral based on certain risk thresholds. These requirements apply individually to the Corporation and to the Bank. Additionally, certain of the Company’s swap contracts contain security agreements that include credit-risk-related contingent features. Under these agreements, the collateral requirements are based on the Company’s credit rating from the major credit rating agencies. The amount of collateral required may vary by counterparty based on a range of credit ratings that correspond with exposure thresholds established in the derivative agreements. If the credit ratings on the Company’s debt were to fall below the level associated with a particular exposure threshold and the derivatives with a counterparty are in a net liability position that exceeds that threshold, the counterparty could request immediate payment or delivery of collateral for the difference between the net liability amount and the exposure threshold. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position on March 31, 2015 was $23.7 million. The Company delivered collateral in the form of securities valued at $14.5 million and cash totaling $41.4 million on swap agreements that had credit-risk-related contingent features and were in a net liability position at March 31, 2015.

The Company’s interest-rate swaps had no credit risk exposure at March 31, 2015 and December 31, 2014, respectively. The credit exposure represents the cost to replace, on a present value basis and at current market rates, all contracts by trading counterparty having an aggregate positive market value, net of margin collateral received. The Company enters into master netting agreements with swap counterparties to mitigate credit risk. Under these agreements, the net amount due from or payable to each counterparty is settled on the contract payment date. No collateral had been received from swap counterparties at March 31, 2015 and December 31, 2014. The Company delivered collateral valued at $6.6 million on swap agreements that did not have credit-risk-related contingent features at March 31, 2015.

At March 31, 2015 the Company had delivered and received cash collateral on foreign exchange contracts totaling $2.1 million and $1.9 million, respectively.

See Note 12, Balance Sheet Offsetting, of the Notes to the Unaudited Consolidated Financial Statements for additional information about the Company’s derivative instruments subject to master netting agreements.

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Note 12. Balance Sheet Offsetting

Assets and liabilities relating to certain financial instruments, including derivatives, securities purchased under resale agreements (“reverse repurchase agreements”) and securities sold under repurchase agreements (“repurchase agreements”), may be eligible for offset in the consolidated balance sheet as permitted under accounting guidance. The Company is party to transactions involving derivative instruments that are subject to enforceable master netting arrangements or similar agreements. Under these agreements, the Company may have the right to net settle multiple contracts with the same counterparty. Certain derivative transactions may require the Company to receive or pledge marketable debt securities as collateral based on certain risk thresholds. The Company also enters into reverse repurchase agreements and collateral swap agreements. Under reverse repurchase agreements, the Company has the right to claim securities collateral if the counterparty fails to perform. Collateral swap agreements involve the exchange of securities collateral under simultaneous repurchase and reverse repurchase agreements with the same bank counterparty. These agreements have the same principal amounts, inception dates and maturity dates, and have been offset against each other in the balance sheet as permitted under the netting provisions of ASC Topic 210-20-45, Balance Sheet — Offsetting. Securities swaps totaled $500.0 million at March 31, 2015. At March 31, 2015, the Company had delivered collateral consisting of agency mortgage-backed securities with a fair value of approximately $540.7 million on the repurchase agreement and accepted collateral consisting of corporate and municipal bonds with a fair value of approximately $528.0 million on the reverse repurchase agreement. Securities that have been pledged by counterparties as collateral are not recorded in the Company’s consolidated balance sheet unless the counterparty defaults. Securities that have been pledged by the Company to counterparties continue to be reported in the Company’s consolidated balance sheet unless the Company defaults.

The Company also offers various derivative products to clients and enters into derivative transactions in due course. These derivative contracts are offset by paired trades with unrelated bank counterparties. Certain derivative transactions with clients are not subject to master netting arrangements and have been excluded from the balance sheet offsetting table below.

The following table provides information about financial instruments that are eligible for offset at March 31, 2015 and December 31, 2014:

								Gross Amounts
						Net Amount		Not Offset in the
	Gross		Gross			Presented		Balance Sheet
	Amount		Amount			in the		Securities			Cash			Net
(in thousands)	Recognized		Offset			Balance Sheet		Collateral			Collateral			Amount
March 31, 2015
Financial assets:
Reverse repurchase agreements	$	700,455	$	(500,153	)	$	200,302	$	(200,000	)	$	—		$	302
Derivatives not designated as hedging instruments	15,560		(443		)	15,117		—			(1,891		)	13,226
Total financial assets	$	716,015	$	(500,596	)	$	215,419	$	(200,000	)	$	(1,891	)	$	13,528
Financial liabilities:
Repurchase agreements	$	500,153	$	(500,153	)	$	—	$	—		$	—		$	—
Derivatives not designated as hedging instruments	76,669		(443		)	76,226		(21,068		)	(41,638		)	13,520
Total financial liabilities	$	576,822	$	(500,596	)	$	76,226	$	(21,068	)	$	(41,638	)	$	13,520
December 31, 2014
Financial assets:
Reverse repurchase agreements	$	700,149	$	(500,041	)	$	200,108	$	(200,000	)	$	—		$	108
Derivatives not designated as hedging instruments	7,669		(1,562		)	6,107		—			—			6,107
Total financial assets	$	707,818	$	(501,603	)	$	206,215	$	(200,000	)	$	—		$	6,215
Financial liabilities:
Repurchase agreements	$	500,041	$	(500,041	)	$	—	$	—		$	—		$	—
Derivatives not designated as hedging instruments	51,125		(1,562		)	49,563		(14,654		)	(28,046		)	6,863
Total financial liabilities	$	551,166	$	(501,603	)	$	49,563	$	(14,654	)	$	(28,046	)	$	6,863

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Note 13. Income Taxes

The Company recognized income tax expense of $30.6 million and $31.0 million for the three months ended March 31, 2015 and 2014, respectively.

The Company recognizes accrued interest and penalties relating to uncertain tax positions as an income tax provision expense. The Company recognized a nominal amount of interest and penalties for the three months ended March 31, 2015 and 2014. The Company had approximately $2.5 million of accrued interest and penalties as of March 31, 2015 and December 31, 2014.

The Company and its subsidiaries file federal and various state income tax returns. The Company is currently being audited by the Internal Revenue Service (“IRS”) for the tax year 2014. The Company is also under audit with the California Franchise Tax Board for the tax years 2005 to 2007. The financial statement impact resulting from completion of these audits is not expected to be material.

From time to time, there may be differences in opinion with respect to the tax treatment of certain transactions. If a tax position which was previously recognized on the consolidated financial statements is no longer more likely than not to be sustained upon a challenge from the taxing authorities, the tax benefit from the tax position will be derecognized. The Company did not have any material tax positions for which previously recognized benefits were derecognized during the three-month period ended March 31, 2015.

Prior period income tax expense has been adjusted to reflect the adoption of ASU 2014-01 on January 1, 2015. See Note 1, Summary of Significant Accounting Policies, for further discussion of ASU 2014-01.

Note 14. Employee Benefit Plans

Defined Contribution Plan

The Company has a profit-sharing retirement plan with an Internal Revenue Code Section 401(k) feature covering eligible employees. Employer contributions are made annually into a trust fund and are allocated to participants based on their salaries. The profit sharing contribution requirement is based on a percentage of annual operating income subject to a percentage of salary cap. Eligible employees may contribute up to 50 percent of their salary to the 401(k) plan, but not more than the maximum allowed under IRS regulations. The Company matches 50 percent of the first 6 percent of covered compensation. The Company recorded total profit sharing and matching contribution expense of $6.0 million and $5.3 million for the three months ended March 31, 2015 and 2014, respectively.

Deferred Compensation Plan

The Company offers a deferred compensation plan for eligible employees and non-employee directors. Participants under the employee plan may make an annual irrevocable election to defer a portion of base salary and up to 100 percent of commission and incentive compensation while employed with the Company. Participants under the non-employee director plan also may make an annual irrevocable election to defer all or part of annual retainers, annual awards, committee chair retainers and meeting fees (collectively, “directors’ fees”) until board service with the Company ceases. The deferred compensation plans are nonqualified plans under IRS regulations. Deferrals are made on a pretax basis and are allocated among the investment crediting options available under the plans as directed by the plan participants. The Company informally funds plan benefits through the purchase of life insurance policies which are recorded in Other assets on the consolidated balance sheets. Participant deferrals are recorded in Other liabilities on the consolidated balance sheets. Employee salaries and non-employee directors’ fees deferred under the plan are charged to Salaries and employee benefits and Other operating expense, respectively, on the consolidated statements of income. Earnings on plan assets, net of benefits payable to plan participants, are reported in Salaries and employee benefits on the consolidated statements of income. The Company recorded net earnings of $0.1 million related to the deferred compensation plan for the three months ended March 31, 2015 and a net expense of $0.1 million for the three months ended March 31, 2014.

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Note 15. Commitments and Contingencies

In the normal course of business, the Company issues financial guarantees in the form of letters of credit. Standby letters of credit are commitments issued by the Company to guarantee the obligations of its client to beneficiaries. Commercial letters of credit are issued on behalf of clients to ensure payment in connection with trade transactions. Exposure to credit loss in the event of nonperformance by the other party to the letters of credit is represented by the contractual notional amount. At March 31, 2015, the Company had $707.7 million outstanding in letters of credit, of which $589.3 million relate to standby letters of credit and $118.4 million relate to commercial letters of credit. The Company had $718.0 million outstanding in letters of credit at December 31, 2014, of which $607.6 million relate to standby letters of credit and $110.4 million relate to commercial letters of credit.

In connection with the liquidation of an investment acquired in a previous bank merger, the Company has an outstanding long-term indemnity. The maximum liability under the indemnity is $23.0 million, but the Company does not expect to make any payments of more than nominal amounts under the terms of this indemnity.

The Company entered into contingent consideration arrangements associated with its acquisition of Rochdale and the sale of its retirement services recordkeeping business. Contingent consideration represents additional purchase price consideration to be transferred from the acquirer to the seller if certain future events or conditions are met. See Note 2, Fair Value Measurements, for additional information about the contingent consideration asset and liability.

Note 16. Variable Interest Entities

The Company holds ownership interests in certain special-purpose entities formed to provide affordable housing. The Company evaluates its interest in these entities to determine whether they meet the definition of a VIE and whether the Company is required to consolidate these entities. The Company is not the primary beneficiary of the affordable housing VIEs in which it holds interests and is therefore not required to consolidate these entities. The investment in these entities is initially recorded at cost, which approximates the maximum exposure to loss as a result of the Company’s involvement with these unconsolidated entities. Subsequently, the carrying value is amortized over the stream of available tax credits and benefits. The Company expects to recover its investments over time, primarily through realization of federal low-income housing tax credits. The balance of the investments in these entities was $190.3 million and $186.4 million at March 31, 2015 and December 31, 2014, respectively, and is included in Affordable housing investments in the consolidated balance sheets. Unfunded commitments for affordable housing investments were $67.8 million at March 31, 2015. These unfunded commitments are recorded in Other liabilities in the consolidated balance sheets.

The Company also has ownership interests in several private equity and alternative investment funds that are VIEs. The Company is not a primary beneficiary and, therefore, is not required to consolidate these VIEs. The investment in these entities is carried at cost and net of impairments, which approximates the maximum exposure to loss as a result of the Company’s involvement with these entities. The Company expects to recover its investments over time, primarily through the allocation of fund income, gains or losses on the sale of fund assets, dividends or interest income. The balance in these entities was $29.2 million at March 31, 2015 and December 31, 2014, and is included in Other assets in the consolidated balance sheets. Income associated with these investments is reported in Other noninterest income in the consolidated statements of income.

Note 17. Noncontrolling Interest

In accordance with ASC Topic 810, Consolidation, and EITF Topic D-98, Classification and Measurement of Redeemable Securities (“Topic D-98”), the Company reports noncontrolling interest in its majority-owned affiliates as Redeemable noncontrolling interest in the mezzanine section between liabilities and equity in the consolidated financial statements. Topic D-98 specifies that securities that are redeemable at the option of the holder or outside the control of the issuer are not considered permanent equity and should be classified in the mezzanine section.

The Corporation holds a majority ownership interest in four investment management and wealth advisory affiliates that it consolidates. In general, the management of each majority-owned affiliate has a significant noncontrolling ownership position in its firm and supervises the day-to-day operations of the affiliate. The Corporation is in regular contact with each affiliate regarding its operations and is an active participant in the management of the affiliates through its position on each firm’s board.

46

Note 17. Noncontrolling Interest (Continued)

The Corporation’s investment in each affiliate is governed by operating agreements and other arrangements which provide the Corporation certain rights, benefits and obligations. The Corporation determines the appropriate method of accounting based upon these agreements and the factors contained therein. All majority-owned affiliates that have met the criteria for consolidation are included in the consolidated financial statements. All material intercompany balances and transactions are eliminated. The Company applies the equity method of accounting for certain investments where it holds a noncontrolling interest. For equity method investments, the Company’s portion of income before taxes is included in Trust and investment fees in the consolidated statements of income.

As of March 31, 2015, affiliate noncontrolling owners held equity interests with an estimated fair value of $37.3 million. This estimate reflects the maximum obligation to purchase equity interests in the affiliates. The events which would require the Company to purchase the equity interests may occur in the near term or over a longer period of time. The terms of the put provisions vary by agreement, but the value of the put is at the approximate fair value of the interests. The parent company carries key man life insurance policies to fund a portion of these conditional purchase obligations in the event of the death of certain key holders.

The following is a summary of activity for redeemable noncontrolling interest for the three months ended March 31, 2015 and 2014:

	For the three months ended March 31,
(in thousands)	2015			2014
Balance, beginning of period	$	39,978		$	39,768
Net income	553			699
Distributions to redeemable noncontrolling interest	(816		)	(347		)
Additions and redemptions, net	(2,662		)	92
Adjustments to fair value	273			5,429
Balance, end of period	$	37,326		$	45,641

Note 18. Segment Results

The Company has three reportable segments: Commercial and Private Banking, Wealth Management and Other. The factors considered in determining whether individual operating segments could be aggregated include that the operating segments: (i) offer the same products and services, (ii) offer services to the same types of clients, (iii) provide services in the same manner and (iv) operate in the same regulatory environment. The management accounting process measures the performance of the operating segments based on the Company’s management structure and is not necessarily comparable with similar information for other financial services companies. If the management structures and/or the allocation process changes, allocations, transfers and assignments may change.

The Commercial and Private Banking reportable segment is the aggregation of the Commercial and Private Banking, Real Estate, Entertainment, Corporate Banking, Core Branch Banking and FAEF operating segments. The Commercial and Private Banking segment provides banking products and services, including commercial and mortgage lending, lines of credit, equipment lease financing, deposits, cash management services, international trade finance and letters of credit to small and medium-sized businesses, entrepreneurs and affluent individuals. This segment primarily serves clients in California, New York, Nevada, Tennessee and Georgia. FAEF serves clients nationwide.

The Wealth Management segment includes the Corporation’s investment advisory affiliates and the Bank’s Wealth Management Services. The asset management affiliates and the Wealth Management division of the Bank make the following investment advisory and wealth management resources and expertise available to individual and institutional clients: investment management, wealth advisory services, brokerage, retirement, estate and financial planning and personal, business, custodial and employee trust services. The Wealth Management segment also advises and makes available mutual funds under the name of City National Rochdale Funds. Both the asset management affiliates and the Bank’s Wealth Management division provide proprietary and nonproprietary products and offer a full spectrum of investment solutions in multiple asset classes and investment styles, including fixed-income instruments, mutual funds, domestic and international equities, and alternative investments such as hedge funds. This segment serves clients nationwide.

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Note 18. Segment Results (Continued)

The Other segment includes all other subsidiaries of the Company, the corporate administration departments, including the Treasury Department and the Asset Liability Funding Center, that have not been allocated to the other segments, and inter-segment eliminations for revenue recognized in multiple segments for management reporting purposes. The Company uses traditional matched-maturity funds transfer pricing methodology. However, both positive and negative variances occur over time when transfer pricing non-maturing balance sheet items such as demand deposits. These variances, offset in the Funding Center, are evaluated at least annually by management and allocated back to the business segments as deemed necessary.

Business segment earnings are the primary measure of the segment’s performance as evaluated by management. Business segment earnings include direct revenue and expenses of the segment as well as corporate and inter-company cost allocations. Allocations of corporate expenses, such as data processing and human resources, are calculated based on estimated activity or usage levels for the fiscal year. Costs associated with intercompany support and services groups, such as Operational Services, are allocated to each business segment based on actual services used. Capital is allocated based on the estimated risk within each business segment. The methodology of allocating capital is based on each business segment’s credit, market, and operational risk profile. If applicable, any provision for credit losses is allocated based on various credit factors, including, but not limited to, credit risk ratings, credit rating fluctuation, charge-offs and recoveries and loan growth. Provision for income taxes is allocated to the segments based on the Company’s effective tax rate.

Exposure to market risk is managed in the Company’s Treasury department. Interest-rate risk is mostly removed from the Commercial and Private Banking segment and transferred to the Funding Center through a fund transfer pricing (“FTP”) methodology and allocation model. The FTP model records a cost of funds or credit for funds using a combination of matched maturity funding for fixed term assets and liabilities and a blended rate for the remaining assets and liabilities with varying maturities.

The Bank’s investment portfolio and unallocated equity are included in the Other segment. Amortization expense associated with customer-relationship intangibles is charged to the affected operating segments.

Selected financial information for each segment is presented in the following tables. Commercial and Private Banking includes all revenue and costs from products and services utilized by clients of Commercial and Private Banking, including both revenue and costs for Wealth Management products and services. The revenues and costs associated with Wealth Management products and services that are allocated to Commercial and Private Banking for management reporting purposes are eliminated in the Other segment. The current period reflects any changes made in the process or methodology for allocations to the reportable segments. Prior period segment results have been revised to conform to current period presentation.

48

Note 18. Segment Results (Continued)

	For the three months ended March 31, 2015
	Commercial and		Wealth					Consolidated
(in thousands)	Private Banking		Management		Other			Company
Earnings Summary:
Net interest income	$	207,826	$	807	$	7,947		$	216,580
Provision for losses on covered loans	497		—		—			497
Noninterest income	51,496		75,089		(15,510		)	111,075
Depreciation and amortization	2,715		1,861		11,783			16,359
Noninterest expense	189,882		54,603		(26,402		)	218,083
Income before income taxes	66,228		19,432		7,056			92,716
Provision for income taxes	21,987		6,268		2,342			30,597
Net income	44,241		13,164		4,714			62,119
Less: Net income attributable to noncontrolling interest	—		553		—			553
Net income attributable to City National Corporation	$	44,241	$	12,611	$	4,714		$	61,566
Selected Average Balances:
Loans and leases, excluding covered loans	$	20,348,103	$	—	$	56,617		$	20,404,720
Covered loans	492,438		—		—			492,438
Total assets	20,960,198		745,258		10,554,163			32,259,619
Deposits	27,549,867		87,848		170,668			27,808,383
Goodwill	393,177		242,691		—			635,868
Customer-relationship intangibles, net	1,650		32,534		—			34,184

	For the three months ended March 31, 2014
	Commercial and		Wealth					Consolidated
(in thousands)	Private Banking		Management		Other			Company
Earnings Summary:
Net interest income	$	189,708	$	325	$	9,765		$	199,798
Provision for losses on covered loans	4,655		—		—			4,655
Noninterest income	47,142		63,566		(9,460		)	101,248
Depreciation and amortization	2,821		1,747		4,747			9,315
Noninterest expense	167,695		52,214		(18,372		)	201,537
Income before income taxes	61,679		9,930		13,930			85,539
Provision for income taxes	22,544		3,375		5,091			31,010
Net income	39,135		6,555		8,839			54,529
Less: Net income attributable to noncontrolling interest	—		699		—			699
Net income attributable to City National Corporation	$	39,135	$	5,856	$	8,839		$	53,830
Selected Average Balances:
Loans and leases, excluding covered loans	$	17,283,410	$	—	$	55,009		$	17,338,419
Covered loans	696,163		—		—			696,163
Total assets	18,239,567		657,723		10,516,708			29,413,998
Deposits	25,051,747		87,769		232,082			25,371,598
Goodwill	393,177		249,445		—			642,622
Customer-relationship intangibles, net	3,134		36,921		—			40,055

49

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS

OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

We have made forward-looking statements in this document about the Company, for which the Company claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are based on management’s knowledge and belief as of today and include information concerning the Company’s possible or assumed future financial condition, and its results of operations, business and earnings outlook. These forward-looking statements are subject to risks and uncertainties. A number of factors, 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) the possibility that the Merger does not close when expected or at all because required regulatory, stockholder or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or that we experience difficulties in employee retention as a result of the announcement and pendency of the proposed Merger; or that clients, distributors, suppliers and competitors seek to change their existing business relationships with us as a result of the announcement of the proposed Merger, any of which may have a negative impact on our business or operations; (2) 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 clients, including changes in consumer spending, borrowing and savings habits; (3) the impact on financial markets and the economy of the level of U.S. and European debt; (4) 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; (5) limited economic growth and elevated levels of unemployment; (6) 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 is uncertain; (7) significant changes in applicable laws and regulations, including those concerning taxes, banking and securities; (8) the impact of cyber security attacks or other disruptions to the Company’s information systems and any resulting compromise of data or disruption in service; (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 clients, or changes in the performance or creditworthiness of our clients’ suppliers or other counterparties, which could lead to decreased loan utilization rates, delinquencies, or defaults and could negatively affect our clients’ 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; and (21) the success of the Company at managing the 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-looking statements to reflect circumstances or events that occur after the date the statements are made, or to update earnings guidance, including the factors that influence earnings.

For a more complete discussion of these risks and uncertainties, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 and particularly, Item 1A, titled “Risk Factors.”

50

CITY NATIONAL CORPORATION

FINANCIAL HIGHLIGHTS

										Percent change
	At or for the three months ended									March 31, 2015 from
	March 31,			December 31,			March 31,			December 31,		March 31,
(in thousands, except per share amounts) (1)	2015			2014			2014			2014		2014
	(Unaudited)			(Unaudited)			(Unaudited)
For The Quarter
Total revenue	$	327,655		$	324,875		$	301,046		1	%	9	%
Net income attributable to City National Corporation	61,566			65,447			53,830			(6	)	14
Net income available to common shareholders	57,472			61,353			49,736			(6	)	16
Net income per common share, basic	1.03			1.10			0.90			(6	)	14
Net income per common share, diluted	1.01			1.09			0.89			(7	)	13
Dividends per common share	0.35			0.33			0.33			6		6
At Quarter End
Assets	$	32,698,899		$	32,597,232		$	29,725,630		0		10
Securities	8,726,740			9,483,202			8,651,359			(8	)	1
Loans and leases, excluding covered loans	20,910,355			20,337,206			17,751,385			3		18
Covered loans (2)	480,236			510,979			673,294			(6	)	(29	)
Deposits	28,517,148			28,108,103			25,731,766			1		11
Common shareholders’ equity	2,750,754			2,675,085			2,515,722			3		9
Total shareholders’ equity	3,018,370			2,942,701			2,783,338			3		8
Book value per common share	49.84			48.83			46.15			2		8
Average Balances
Assets	$	32,259,619		$	32,662,423		$	29,413,998		(1	)	10
Securities	9,091,506			9,353,966			8,585,220			(3	)	6
Loans and leases, excluding covered loans	20,404,720			19,649,780			17,338,419			4		18
Covered loans (2)	492,438			530,432			696,163			(7	)	(29	)
Deposits	27,808,383			28,551,916			25,371,598			(3	)	10
Common shareholders’ equity	2,711,589			2,659,030			2,500,413			2		8
Total shareholders’ equity	2,979,205			2,926,647			2,768,030			2		8
Selected Ratios
Return on average assets (annualized)	0.77		%	0.79		%	0.74		%	(3	)	4
Return on average common equity (annualized)	8.60			9.15			8.07			(6	)	7
Common equity tier 1 capital (3)	8.71			N/A			N/A			NM		NM
Corporation’s tier 1 risk-based capital (3)	9.82			9.78			10.18			NM		NM
Corporation’s total risk-based capital (3)	11.87			11.95			13.08			NM		NM
Corporation’s tier 1 leverage (3)	7.53			7.22			7.41			NM		NM
Period-end common equity to period-end assets	8.41			8.21			8.46			2		(1	)
Period-end equity to period-end assets	9.23			9.03			9.36			2		(1	)
Common dividend payout ratio	34.01			29.94			36.64			14		(7	)
Net interest margin	2.99			2.96			3.02			1		(1	)
Expense to revenue ratio (4)	69.21			68.88			68.41			0		1
Asset Quality Ratios (5)
Nonaccrual loans to total loans and leases	0.16		%	0.21		%	0.40		%	(24	)	(60	)
Nonaccrual loans and OREO to total loans and leases and OREO	0.19			0.26			0.45			(27	)	(58	)
Allowance for loan and lease losses to total loans and leases	1.48			1.53			1.72			(3	)	(14	)
Allowance for loan and lease losses to nonaccrual loans	925.39			735.53			429.21			26		116
Net (charge-offs) recoveries to average total loans and leases (annualized)	(0.01		)	0.09			0.10			(111	)	(110	)
At Quarter End
Assets under management (6)	$	48,446,050		$	48,062,760		$	46,374,203		1		4
Assets under management or administration (6)	61,950,516			60,818,930			66,399,813			2		(7	)

NM - Not meaningful
(1)	Certain prior period amounts have been adjusted to reflect the adoption of ASU 2014-01. See Note 1, Summary of Significant Accounting Policies, of the Notes to the Unaudited Consolidated Financial Statements for further discussion.
(2)	Covered loans represent acquired loans that are covered under loss-sharing agreements with the Federal Deposit Insurance Corporation (“FDIC”).
(3)	Risk-based capital ratios for the current period were calculated under Basel III rules, which became effective for the Company on January 1, 2015. Ratios for the prior periods were calculated under Basel I rules. See “Balance Sheet Analysis - Capital” included elsewhere in this document for further discussion.
(4)	The expense to revenue ratio is defined as noninterest expense excluding other real estate owned (“OREO”) expense divided by total net interest income on a fully taxable-equivalent basis and noninterest income.
(5)	Excludes covered assets, which consist of acquired loans and OREO that are covered under loss-sharing agreements with the FDIC.
(6)	Excludes $31.48 billion, $28.32 billion and $26.09 billion of assets under management for asset managers in which the Company held a noncontrolling ownership interest as of March 31, 2015, December 31, 2014 and March 31, 2014, respectively.

51

CRITICAL ACCOUNTING POLICIES

The accounting and reporting policies of the Company conform with U.S. generally accepted accounting principles (“GAAP”). The Company’s accounting policies are fundamental to understanding management’s discussion and analysis of results of operations and financial condition. The Company has identified five policies as critical because they require management to make estimates, assumptions and judgments that affect the reported amount of assets and liabilities, contingent assets and liabilities, and revenues and expenses included in the consolidated financial statements. The judgments and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. Circumstances and events that differ significantly from those underlying the Company’s estimates, assumptions and judgments could cause the actual amounts reported to differ significantly from these estimates.

The Company’s critical accounting policies include those that address financial assets and liabilities reported at fair value, acquired impaired loans, allowance for loan and lease losses and reserve for off-balance sheet credit commitments, goodwill and other intangible assets, and income taxes. The Company has not made any significant changes in its critical accounting policies or its estimates and assumptions from those disclosed in its 2014 Annual Report other than the adoption of new accounting pronouncements and other authoritative guidance that became effective for the Company on or after January 1, 2015. Refer to Note 1, Summary of Significant Accounting Policies, of the Notes to the Unaudited Consolidated Financial Statements for further discussion. Management has applied its critical accounting policies and estimation methods consistently in all periods presented in these financial statements.

HIGHLIGHTS

·Consolidated net income attributable to City National Corporation was $61.6 million for the first quarter of 2015, up 14 percent from $53.8 million in the year-earlier quarter but down 6 percent from $65.4 million for the fourth quarter of 2014. For the first quarter of 2015, consolidated net income available to common shareholders was $57.5 million, or $1.01 per diluted share. Net income available to common shareholders was $49.7 million, or $0.89 per diluted share, for the year-earlier quarter and $61.4 million, or $1.09 per diluted share, for the fourth quarter of 2014.

·Revenue, which consists of net interest income and noninterest income, was $327.7 million for the first quarter of 2015, up 9 percent from $301.0 million in the year-earlier quarter and up 1 percent from $324.9 million in the fourth quarter of 2014.

·Fully taxable-equivalent net interest income, including dividend income, amounted to $224.8 million for the first quarter of 2015, up 9 percent from $206.1 million for the first quarter of 2014 but down 3 percent from $231.3 million for the fourth quarter of 2014.

·Net interest margin for the first quarter of 2015 was 2.99 percent, down from 3.02 percent for the first quarter of 2014 and up from 2.96 percent for the fourth quarter of 2014. The decline in net interest margin from the year-earlier quarter was primarily due to lower yields on loans and lower income from covered loans, partially offset by lower cost on interest-bearing liabilities. The increase from the fourth quarter of 2014 was primarily the result of a change in the asset mix, as lower yielding investments and due from bank balances were replaced with higher yielding loans.

·Noninterest income was $111.1 million in the first quarter of 2015, up 10 percent from the first quarter of 2014 and fourth quarter of 2014. The increase from the year-earlier quarter was due in part to higher trust and investment fee income and a higher net gain on the sale of securities. The increase from the fourth quarter of 2014 was largely due to lower FDIC loss sharing expense and a higher net gain on the sale of securities. Results for the first quarter of 2015 also included $5.0 million in life insurance proceeds associated with an insurable event at one of the Company’s investment affiliates.

·Trust and investment fee income grew to $55.5 million in the first quarter of 2015, up 4 percent from the year-earlier quarter but down 2 percent from the fourth quarter of 2014. Assets under management (“AUM”) totaled $48.45 billion as of March 31, 2015, up 4 percent from March 31, 2014 and 1 percent higher than at December 31, 2014. The increases were primarily due to asset inflows and market appreciation.

52

·Noninterest expense for the first quarter of 2015 was $234.4 million, up 11 percent from the first quarter of 2014 and 2 percent higher from the fourth quarter of 2014. The increase from the year-earlier quarter largely reflects higher compensation costs, an increase in depreciation and amortization expense related to fixed assets and software, and higher OREO expense and FDIC assessments. Results for the first quarter of 2015 also included $3.2 million in transaction costs related to the planned merger with Royal Bank of Canada (“RBC”), which are reflected mainly in legal and professional fees.

·The base yield on the covered loan portfolio generated net interest income of $9.9 million in the first quarter of 2015, compared to $12.5 million for the year-earlier quarter and $10.3 million in the fourth quarter of 2014. Base yield is the yield on covered loans, excluding income from covered loans that were paid off or fully charged off. The Company recognizes other components of income and expense related to its covered assets, including income from covered loans that were paid off or fully charged off, net impairment charges and other covered assets income and expenses. These components fluctuate from period to period. When aggregated, the impact of these items to the income statement, excluding the base yield, was total net expense of $1.3 million for the first quarter of 2015, compared to net expense of $3.6 million for the first quarter of 2014 and $0.8 million for the fourth quarter of 2014. Refer to the “Net Interest Income,” “Provision for Credit Losses” and “Covered Assets” sections included elsewhere in this report for further discussion.

·The Company’s effective tax rate was 33.0 percent for the first quarter of 2015, compared with 36.3 percent for the year-earlier quarter and 33.9 percent for the fourth quarter of 2014. The effective tax rate reflects the Company’s adoption of the new accounting standard for low-income housing tax credits. Refer to Note 1, Summary of Significant Accounting Policies, of the Notes to the Unaudited Consolidated Financial Statements for further discussion.

·Total assets were $32.70 billion at March 31, 2015, up 10 percent from $29.73 billion at March 31, 2014 and up less than 1 percent from $32.60 billion at December 31, 2014. Total average assets were $32.26 billion for the first quarter of 2015, up 10 percent from $29.41 billion for the first quarter of 2014 but down 1 percent from $32.66 billion for the fourth quarter of 2014.

·Loans and leases, excluding covered loans, grew to $20.91 billion at March 31, 2015, an increase of 18 percent from $17.75 billion at March 31, 2014 and 3 percent from $20.34 billion at December 31, 2014. Average loan and lease balances, excluding covered loans, were $20.40 billion for the first quarter of 2015, up 18 percent from the same period of last year and 4 percent higher from the fourth quarter of 2014.

·Excluding covered loans, first quarter 2015 results included no provision for loan and lease losses. The Company recorded no provision in the first quarter of 2014 and a $5.0 million reversal of provision for loan and lease losses in the fourth quarter of 2014. The allowance for loan and lease losses on non-covered loans was $308.9 million at March 31, 2015, compared with $305.8 million at March 31, 2014 and $310.1 million at December 31, 2014. The Company remains appropriately reserved at 1.48 percent of total loans and leases, excluding covered loans, at March 31, 2015, compared with 1.72 percent at March 31, 2014 and 1.53 percent at December 31, 2014.

·In the first quarter of 2015, net loan charge-offs totaled $0.4 million, or 0.01 percent of average total loans and leases, excluding covered loans, on an annualized basis, compared with net recoveries of $4.2 million, or 0.10 percent, in the year-earlier quarter, and net recoveries of $4.3 million, or 0.09 percent, for the fourth quarter of 2014. Nonaccrual loans, excluding covered loans, totaled $33.4 million at March 31, 2015, down from $71.2 million at March 31, 2014 and $42.2 million at December 31, 2014. At March 31, 2015, nonperforming assets, excluding covered assets, were $39.3 million, down from $80.7 million at March 31, 2014 and $52.9 million at December 31, 2014.

·Average securities for the first quarter of 2015 totaled $9.09 billion, up 6 percent from the first quarter of 2014 but down 3 percent from the fourth quarter of 2014.

·Period-end deposits at March 31, 2015 were $28.52 billion, up 11 percent from $25.73 billion at March 31, 2014 and 1 percent from $28.11 billion at December 31, 2014. Deposit balances for the first quarter of 2015 averaged $27.81 billion, up 10 percent from $25.37 billion for the first quarter of 2014 but down 3 percent from $28.55 billion for the fourth quarter of 2014. Average core deposits, which equal 98 percent of total deposit balances for the first quarter of 2015, were up 10 percent from the first quarter of 2014 but down 3 percent from the fourth quarter of 2014.

53

·The Company remains well capitalized. Under Basel III capital rules, which became effective for the Company on January 1, 2015, the Common equity tier 1 capital ratio was 8.71 percent at March 31, 2015. Refer to the “Capital” section included elsewhere in this report for further discussion.

·On January 22, 2015, the Company announced that it agreed to merge with Toronto-based RBC, in a transaction that is expected to close before the end of the calendar year 2015.  The agreement has been approved by the boards of both companies.

RESULTS OF OPERATIONS

Net Interest Income

Net interest income is the difference between interest income (which includes yield-related loan fees) and interest expense. Net interest income on a fully taxable-equivalent basis expressed as a percentage of average total earning assets is referred to as the net interest margin, which represents the average net effective yield on earning assets. The following table presents the components of net interest income on a fully taxable-equivalent basis for the three months ended March 31, 2015 and 2014:

54

Net Interest Income Summary

	For the three months ended							For the three months ended
	March 31, 2015							March 31, 2014
				Interest		Average					Interest		Average
	Average			income/		interest		Average			income/		interest
(in thousands) (1)	balance			expense (2)(3)		rate		balance			expense (2)(3)		rate
Assets
Interest-earning assets
Loans and leases
Commercial	$	9,895,873		$	78,244	3.21	%	$	8,262,917		$	68,169	3.35	%
Commercial real estate mortgages	3,611,728			31,901		3.58		3,254,793			29,326		3.65
Residential mortgages	5,180,755			43,448		3.35		4,595,999			40,865		3.56
Real estate construction	748,899			6,359		3.44		376,231			3,470		3.74
Home equity loans and lines of credit	780,218			6,846		3.56		695,086			6,209		3.62
Installment	187,247			2,022		4.38		153,393			1,695		4.48
Total loans and leases, excluding covered loans (4)	20,404,720			168,820		3.36		17,338,419			149,734		3.50
Covered loans	492,438			18,263		14.83		696,163			21,852		12.56
Total loans and leases	20,897,158			187,083		3.63		18,034,582			171,586		3.86
Due from banks - interest-bearing	268,237			136		0.21		665,184			443		0.27
Federal funds sold and securities purchased under resale agreements	200,000			1,241		2.52		278,967			1,370		1.99
Securities	9,091,506			46,170		2.03		8,585,220			44,775		2.09
Other interest-earning assets	65,442			1,028		6.37		76,935			1,210		6.38
Total interest-earning assets	30,522,343			235,658		3.13		27,640,888			219,384		3.22
Allowance for loan and lease losses	(320,064		)					(323,345		)
Cash and due from banks	202,577							247,885
Other non-earning assets	1,854,763							1,848,570
Total assets	$	32,259,619						$	29,413,998
Liabilities and Equity
Interest-bearing deposits
Interest checking accounts	$	2,728,368		$	315	0.05	%	$	2,420,356		$	383	0.06	%
Money market accounts	6,156,865			1,059		0.07		6,365,290			1,100		0.07
Savings deposits	501,658			75		0.06		454,226			68		0.06
Time deposits - under $100,000	153,827			70		0.19		174,069			93		0.22
Time deposits - $100,000 and over	519,052			401		0.31		483,428			490		0.41
Total interest-bearing deposits	10,059,770			1,920		0.08		9,897,369			2,134		0.09
Federal funds purchased and securities sold under repurchase agreements	254,955			71		0.11		—			—		—
Other borrowings	639,965			8,910		5.65		738,893			11,153		6.12
Total interest-bearing liabilities	10,954,690			10,901		0.40		10,636,262			13,287		0.51
Noninterest-bearing deposits	17,748,613							15,474,229
Other liabilities	577,111							535,477
Total equity	2,979,205							2,768,030
Total liabilities and equity	$	32,259,619						$	29,413,998
Net interest spread						2.73	%						2.71	%
Fully taxable-equivalent net interest and dividend income				$	224,757						$	206,097
Net interest margin						2.99	%						3.02	%
Less: Dividend income included in other income				1,028							1,210
Fully taxable-equivalent net interest income				$	223,729						$	204,887

(1)Certain prior period amounts have been adjusted to reflect the adoption of ASU 2014-01. See Note 1, Summary of Significant Accounting Policies, of the Notes to the Unaudited Consolidated Financial Statements for further discussion.

(2)Net interest income is presented on a fully taxable-equivalent basis.

(3)Loan income includes loan fees of $5,727 and $6,231 for 2015 and 2014, respectively.

(4)Includes average nonaccrual loans of $37,699 and $68,322 for 2015 and 2014, respectively.

55

Net interest income is impacted by the volume (changes in volume multiplied by prior rate), interest rate (changes in rate multiplied by prior volume) and mix of interest-earning assets and interest-bearing liabilities. The following table provides a breakdown of the changes in net interest income and dividend income on a fully taxable-equivalent basis due to volume and rate between the first quarter of 2015 and 2014, as well as the first quarter of 2014 and 2013.

Changes in Net Interest Income

	For the three months ended March 31,									For the three months ended March 31,
	2015 vs 2014									2014 vs 2013
	Increase (decrease)						Net			Increase (decrease)						Net
	due to						increase			due to						increase
(in thousands)	Volume			Rate			(decrease)			Volume			Rate			(decrease)
Interest earned on:
Total loans and leases (1)	$	26,063		$	(10,566	)	$	15,497		$	22,719		$	(23,149	)	$	(430	)
Securities	2,570			(1,175		)	1,395			(6,026		)	3,971			(2,055		)
Due from banks - interest-bearing	(220		)	(87		)	(307		)	313			18			331
Federal funds sold and securities purchased under resale agreements	(441		)	312			(129		)	703			(469		)	234
Other interest-earning assets	(181		)	(1		)	(182		)	(304		)	553			249
Total interest-earning assets	27,791			(11,517		)	16,274			17,405			(19,076		)	(1,671		)
Interest paid on:
Interest checking deposits	45			(113		)	(68		)	36			(70		)	(34		)
Money market deposits	(36		)	(5		)	(41		)	172			(669		)	(497		)
Savings deposits	7			—			7			9			(56		)	(47		)
Time deposits	14			(126		)	(112		)	(138		)	(89		)	(227		)
Total borrowings	2,050			(4,222		)	(2,172		)	(11,997		)	11,362			(635		)
Total interest-bearing liabilities	2,080			(4,466		)	(2,386		)	(11,918		)	10,478			(1,440		)
	$	25,711		$	(7,051	)	$	18,660		$	29,323		$	(29,554	)	$	(231	)

(1) Includes covered loans.

Net interest income was $216.6 million for the first quarter of 2015, a decrease of 3 percent from $223.6 million for the fourth quarter of 2014, and an increase of 8 percent from $199.8 million for the first quarter of 2014. The decrease in net interest income from the fourth quarter of 2014 was largely due to lower interest income from covered loans and securities. The increase in net interest income from the prior-year quarter was due to higher income from non-covered loans and lower interest expense on deposits and borrowings, partially offset by lower interest income from covered loans. Fully taxable-equivalent net interest income and dividend income was $224.8 million for the first quarter of 2015, compared to $231.3 million for the fourth quarter of 2014 and $206.1 million for the first quarter of 2014.

Interest income on total loans was $184.0 million for the first quarter of 2015, down 1 percent from the fourth quarter of 2014 and up 8 percent from the first quarter of 2014. The decrease in loan interest income from the prior quarter was driven by lower income from covered loans, in both the base yield and net accelerated accretable yield recognition on covered loans that were paid off or fully charged off. Compared to the year-earlier quarter, the increase in interest income was driven by growth in the non-covered loan portfolio, partially offset by a decrease in income from covered loans. Income from accelerated accretable yield recognition during the first quarter of 2015 was $8.4 million, compared to $9.9 million in the prior quarter and $9.3 million in the year-earlier quarter. Refer to “Covered Assets” included elsewhere in this report for further discussion of interest income on covered loans.

Average loans and leases, excluding covered loans, totaled $20.40 billion for the first quarter of 2015, an increase of 4 percent from $19.65 billion for the fourth quarter of 2014 and up 18 percent from $17.34 billion for the first quarter of 2014. Average commercial loans grew 5 percent and 20 percent from the fourth quarter of 2014 and first quarter of 2014, respectively. Average commercial real estate balances increased 2 percent from the prior quarter and 11 percent from the year-earlier quarter, while average residential mortgage loans were up 3 and 13 percent from the respective periods. Average covered loans decreased to $492.4 million for the first quarter of 2015 from $530.4 million for the fourth quarter of 2014 and $696.2 million for the year-ago quarter.

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Interest income on securities was $42.1 million for the first quarter of 2015, a 7 percent decrease from $45.2 million for the fourth quarter of 2014 and a 1 percent increase from $41.6 million for the first quarter of 2014. Average total securities were $9.09 billion for the first quarter of 2015, down 3 percent from $9.35 billion for the fourth quarter of 2014 and up 6 percent from $8.59 billion for the year-earlier quarter. The decrease in income from the prior quarter was due to lower average portfolio balances during the first quarter of 2015 and prepayment premiums received on accelerated paydowns during the fourth quarter of 2014. The increase in income from the year-earlier quarter was primarily due to the increase in the average portfolio balance, partially offset by a lower yield.

Total interest expense was $10.9 million for the first quarter of 2015, virtually unchanged from the fourth quarter of 2014 and down 18 percent from $13.3 million for the first quarter of 2014. Interest expense on borrowings was $9.0 million for the first quarter of 2015, up 2 percent from $8.8 million for the fourth quarter of 2014 and down 19 percent from $11.2 million for the first quarter of 2014. The decrease in total interest expense from the year-earlier quarter was primarily due to the redemption of $105.0 million in subordinated notes during the third quarter of 2014.

Interest expense on deposits was $1.9 million for the first quarter of 2015, down 6 percent from $2.0 million for the fourth quarter of 2014 and down 10 percent from $2.1 million for the year-earlier quarter. The decrease in interest expense from the prior quarter was due to lower average interest-bearing deposits balances. Compared to the first quarter of 2014, the impact of lower rates more than offset the impact of higher average interest-bearing deposit balances in the first quarter of 2015. Average deposits were $27.81 billion for the first quarter of 2015, down 3 percent from $28.55 billion for the fourth quarter of 2014, and up 10 percent from $25.37 billion for the first quarter of 2014. Average core deposits, which do not include certificates of deposits of $100,000 or more, were $27.29 billion for the first quarter of 2015, $28.06 billion for the fourth quarter of 2014 and $24.89 billion for the year-earlier quarter, which represented 98 percent of total average deposits for each respective period. Average interest-bearing deposits were $10.06 billion for the first quarter of 2015, down 3 percent from $10.39 billion for the fourth quarter of 2014, and up 2 percent from $9.90 billion for the first quarter of 2014. Average noninterest-bearing deposits were $17.75 billion, down 2 percent from the fourth quarter of 2014 and up 15 percent from the year-earlier quarter.

Net interest margin was 2.99 percent for the first quarter of 2015, up from 2.96 percent for the fourth quarter of 2014 and down from 3.02 percent for the first quarter of 2014. The average yield on earning assets for the first quarter of 2015 was 3.13 percent, up 3 basis points from 3.10 percent for the fourth quarter of 2014 and down 9 basis points from 3.22 percent for the year-earlier quarter. The average cost of interest-bearing liabilities was 0.40 percent, up from 0.39 percent for the fourth quarter of 2014 and down 11 basis points from 0.51 percent for the first quarter of 2014. The increase in the net interest margin from the prior quarter was primarily the result of a change in the asset mix, as lower yielding investments and due from bank balances were replaced with higher yielding loans, partially offset by lower interest income on covered loans. Compared to the year-earlier quarter, the decrease in the net interest margin was mainly attributable to lower yields on loans, lower income from the net accelerated accretable yield recognition on covered loans that were paid off or fully charged off and declining volumes of covered loans, partially offset by a lower cost of interest-bearing liabilities.

Provision for Credit Losses

The Company accounts for the credit risk associated with lending activities through its allowance for loan and lease losses, reserve for off-balance sheet credit commitments and provision for credit losses. The provision for credit losses on loans and leases, excluding covered loans, is the expense recognized in the consolidated statements of income to adjust the allowance and the reserve for off-balance sheet credit commitments to the levels deemed appropriate by management, as determined through application of the Company’s allowance methodology procedures. See “Critical Accounting Policies— Allowance for Loan and Lease Losses and Reserve for Off-Balance Sheet Credit Commitments” in the Company’s Form 10-K for the year ended December 31, 2014.

The Company recorded no provision for credit losses on loans and leases, excluding covered loans, during the quarters ended March 31, 2015 and 2014. The Company recorded a $5.0 million reversal of provision for the fourth quarter of 2014. The provision reflects management’s continuing assessment of the credit quality of the Company’s loan portfolio, which is affected by a broad range of economic factors. Additional factors affecting the provision include net loan charge-offs or recoveries, nonaccrual loans, specific reserves, risk rating migration and changes in the portfolio size and composition. See “Balance Sheet Analysis—Allowance for Loan and Lease Losses and Reserve for Off-Balance Sheet Credit Commitments” included elsewhere in this report for further information on factors considered by the Company in assessing the credit quality of the loan portfolio and establishing the allowance for loan and lease losses.

57

Covered loans represent loans acquired from the FDIC that are subject to loss-sharing agreements, and are primarily accounted for as acquired impaired loans under Accounting Standards Codification (“ASC”) Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“ASC 310-30”). The provision for losses on covered loans is the expense recognized in the consolidated statements of income related to impairment losses resulting from the Company’s quarterly review and update of cash flow projections on its covered loan portfolio. The Company recorded a $0.5 million provision for losses on covered loans during the first quarter of 2015, compared to a $46 thousand provision in the fourth quarter of 2014 and a $4.7 million provision during the first quarter of 2014. Refer to “Covered Assets” included elsewhere in this report for further discussion of the provision for losses on covered loans.

Credit quality will be influenced by underlying trends in the economic cycle, particularly in California and New York, and other factors which are beyond management’s control. Consequently, no assurances can be given that the Company will not sustain loan or lease losses, in any particular period, that are sizable in relation to the allowance for loan and lease losses.

Refer to “Loans and Leases—Asset Quality” included elsewhere in this report for further discussion of credit quality.

Noninterest Income

Noninterest income was $111.1 million in the first quarter of 2015, up 10 percent from the fourth quarter of 2014 and first quarter of 2014. The increase from the fourth quarter of 2014 was largely due to lower FDIC loss sharing expense and higher net gain on the sale of securities. The increase from the year-earlier quarter was due to growth in trust and investment fees, client swap fees and credit card fees, and higher net gain on the sale of securities. Noninterest income in the first quarter of 2015 also included receipt of a $5.0 million life insurance benefit payment to an investment affiliate. These increases were partially offset by a lower net gain on the disposal of foreclosed assets. Noninterest income represented 34 percent of the Company’s revenue in the first quarter of 2015, compared to 31 percent in the fourth quarter of 2014 and 34 percent for the first quarter of 2014.

The following table provides a summary of noninterest income by category:

	For the three months ended
	March 31,			December 31,			March 31,
(in thousands)	2015			2014			2014
Trust and investment fees	$	55,521		$	56,596		$	53,306
Brokerage and mutual fund fees	10,598			10,839			10,042
Total wealth management fees	66,119			67,435			63,348
Cash management and deposit transaction charges	12,633			12,461			12,033
International services	10,668			11,957			10,395
FDIC loss sharing expense, net	(6,688		)	(12,008		)	(7,083		)
Other noninterest income	24,922			20,807			17,607
Total noninterest income before gain	107,654			100,652			96,300
Gain on disposal of assets	110			631			2,826
Gain on sale of securities	3,376			128			2,122
Impairment loss on securities	(65		)	(97		)	—
Total noninterest income	$	111,075		$	101,314		$	101,248

Wealth Management

The Company provides various trust, investment and wealth advisory services to its individual, institutional and business clients. The Company delivers these services through the Bank’s wealth management division as well as through its wealth management affiliates. Trust services are provided only by the Bank. Trust and investment fee revenue includes fees from trust, investment and asset management, and other wealth advisory services. The majority of these fees are based on the market value of client assets managed, advised, administered or held in custody. The remaining portion of these fees is based on the specific service provided, such as estate and financial planning services, or may be fixed fees. For those fees based on market valuations, the mix of assets held in client accounts, as well as the type of managed account, impacts how closely changes in trust and investment fee income correlate with changes in the financial markets. Changes in market valuations are reflected in fee income on a trailing day, month or quarter basis. Also included in total trust and investment fees is the Company’s portion of income from certain investments accounted for under the equity method.

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Trust and investment fees were $55.5 million for the first quarter of 2015, a decrease of 2 percent from $56.6 million for the fourth quarter of 2014 and an increase of 4 percent from $53.3 million for the first quarter of 2014. Money market mutual fund and brokerage fees were $10.6 million for the first quarter of 2015, a decrease of 2 percent from $10.8 million for the fourth quarter of 2014, but up 6 percent from $10.0 million for the year-earlier quarter. The increases in fee income compared to the year-earlier quarter were largely due to asset inflows from new and existing clients and market appreciation.

AUM includes assets for which the Company makes investment decisions on behalf of its clients and assets under advisement for which the Company receives advisory fees from its clients. Assets under administration (“AUA”) are assets the Company holds in a fiduciary capacity or for which it provides non-advisory services. The table below provides a summary of AUM and AUA for the dates indicated:

	March 31,				%		December 31,		%
(in millions)	2015		2014		Change		2014		Change
Assets Under Management	$	48,446	$	46,374	4		$	48,063	1
Assets Under Administration
Brokerage	6,457		5,628		15		6,321		2
Custody and other fiduciary	7,048		14,398		(51	)	6,435		10
Subtotal	13,505		20,026		(33	)	12,756		6
Total assets under management or administration (1)	$	61,951	$	66,400	(7	)	$	60,819	2

(1)   Excludes $31.48 billion, $28.32 billion and $26.09 billion of assets under management for asset managers in which the Company held a noncontrolling ownership interest as of March 31, 2015, December 31, 2014 and March 31, 2014, respectively.

AUM totaled $48.45 billion as of March 31, 2015, up 1 percent from the fourth quarter of 2014 and up 4 percent from the year-earlier quarter. Assets under management or administration were $61.95 billion at March 31, 2015, up 2 percent from the fourth quarter of 2014 and down 7 percent from the year-earlier quarter. The growth in AUM compared to prior periods was primarily attributable to the addition of client assets and higher market valuations. The decrease in AUA from the year ago period reflects the sale of the Company’s retirement services recordkeeping business in the third quarter of 2014.

A distribution of AUM by type of investment is provided in the following table:

	% of Assets Under Management
Investment	March 31, 2015		December 31, 2014		March 31, 2014
Equities	47	%	48	%	48	%
U.S. fixed income	29		26		27
Cash and cash equivalents	17		16		16
Other (1)	7		10		9
	100	%	100	%	100	%

(1) Includes private equity and other alternative investments.

Other Noninterest Income

Cash management and deposit transaction fees for the first quarter of 2015 were $12.6 million, up 1 percent from the fourth quarter of 2014 and 5 percent from the first quarter of 2014.

International services income for the first quarter of 2015 was $10.7 million, down 11 percent from the fourth quarter of 2014 and up 3 percent from the year-earlier quarter. International services income is comprised of foreign exchange fees, fees on commercial letters of credit and standby letters of credit, foreign collection fees, and gains and losses associated with fluctuations in foreign currency exchange rates. Fee income for the fourth quarter of 2014 reflected unusually strong year-end foreign exchange activity. The increase from the year-earlier quarter was due to increased client activity and the addition of new clients.

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Net FDIC loss sharing expense decreased to $6.7 million for the first quarter of 2015, compared to net expense of $12.0 million for the fourth quarter of 2014 and $7.1 million for the year-earlier quarter. See “Covered Assets” included elsewhere in this report for further discussion of FDIC loss sharing income and expense.

Net gain on disposal of assets was $0.1 million in the first quarter of 2015, compared to $0.6 million in the fourth quarter of 2014 and $2.8 million in the year-earlier quarter. The net gain for all periods is primarily comprised of gains recognized on the sale of covered and non-covered foreclosed assets.

The Company recognized net gains on sales of securities of $3.4 million during the first quarter of 2015. Net gains on sales of securities were $0.1 million in the fourth quarter of 2014 and $2.1 million for the first quarter of 2014. Impairment losses of $0.1 million were recognized in earnings on securities available-for-sale in the first quarter of 2015 and fourth quarter of 2014. No impairment losses were recognized in earnings on securities available-for-sale in the year-earlier quarter.

Other income for the first quarter of 2015 was $24.9 million, up 20 percent from $20.8 million for the fourth quarter of 2014, and up 42 percent from $17.6 million for the first quarter of 2014. The increase from the prior-year periods was due to the receipt of $5.0 million in life insurance proceeds associated with an insurable event at one of the Company’s investment affiliates, as well as higher income from client swap transactions and higher credit card and interchange fees. These increases were partially offset by lower gains recognized on transfers of covered loans to OREO and higher other-than-temporary impairment losses on private equity investments.

Noninterest Expense

Noninterest expense was $234.4 million for the first quarter of 2015, up 2 percent from $229.7 million for the fourth quarter of 2014, and up 11 percent from $210.9 million for the first quarter of 2014. The following table provides a summary of noninterest expense by category:

	For the three months ended
	March 31,		December 31,		March 31,
(in thousands) (1)	2015		2014		2014
Salaries and employee benefits	$	144,568	$	143,383	$	136,833
All other:
Net occupancy of premises	16,073		15,722		16,094
Legal and professional fees	16,938		16,264		12,950
Information services	9,860		10,576		9,346
Depreciation and amortization	14,982		8,432		7,828
Amortization of intangibles	1,377		1,424		1,487
Marketing and advertising	8,830		10,343		9,775
Office services and equipment	5,136		5,488		4,910
Other real estate owned	2,731		1,302		1,433
FDIC assessments	5,094		4,732		1,391
Other operating	8,853		12,032		8,805
Total all other	89,874		86,315		74,019
Total noninterest expense	$	234,442	$	229,698	$	210,852

(1)Certain prior period amounts have been adjusted to reflect the adoption of ASU 2014-01. See Note 1, Summary of Significant Accounting Policies, of the Notes to the Unaudited Consolidated Financial Statements for further discussion.

Salaries and employee benefits expense was $144.6 million for the first quarter of 2015, up 1 percent from $143.4 million for the fourth quarter of 2014 and 6 percent from $136.8 million for the year-earlier quarter. Full-time equivalent staff was 3,578 at March 31, 2015, up from 3,570 at December 31, 2014 and down from 3,587 at March 31, 2014. Decreases in staff compared with the year-earlier period related to the sale of the Company’s retirement services recordkeeping business in the third quarter of 2014, which were partially offset by selected staff increases to support growth. The increase in salaries and employee benefits expense in the first quarter compared with the prior quarter was largely due to seasonally higher payroll taxes that were partially offset by lower incentive compensation expense. The increase in salaries and employee benefits expense from the year-earlier quarter was due to higher personnel costs, net of the impact related to the sale of the retirement services recordkeeping business, higher incentive compensation and higher group insurance costs.

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Salaries and employee benefits expense for the first quarter of 2015 includes $6.2 million of share-based compensation expense compared with $5.8 million for the fourth quarter of 2014 and $5.4 million for the year-earlier quarter. The increase from the prior periods was primarily attributable to expense associated with cash-settled restricted stock units, which fluctuates based on the Company’s stock price. The Company’s average stock price increased in the first quarter of 2015 compared with the prior periods. See Note 10, Share-Based Compensation, of the Notes to the Unaudited Consolidated Financial Statements for further discussion of share-based compensation.

The remaining noninterest expense categories totaled $89.9 million for the first quarter of 2015, up 4 percent from $86.3 million for the fourth quarter of 2014 and up 21 percent from $74.0 million for the first quarter of 2014. The growth in expense compared with prior periods was largely due to an increase in depreciation and amortization expense related to fixed assets and software, higher OREO expense on covered assets, higher FDIC assessments, and higher legal and professional fees. Depreciation and amortization expense in the first quarter of 2015 included an additional $5.9 million in expense to correctly board capitalized projects that were completed and placed in service in prior periods. The increase in expense compared with prior periods was partially offset by a decline in marketing and advertising expenses and lower legal and professional fees related to covered assets.

Legal and professional fees were $16.9 million for the first quarter of 2015, up 4 percent from $16.3 million in the fourth quarter of 2015 and up 31 percent from $13.0 million in the year-earlier quarter. Legal and professional fees for the first quarter of 2015 included $3.1 million in transaction costs related to the planned merger with RBC. The increase from the year-earlier quarter also reflects higher sub-advisory fees associated with asset growth in advised funds.

Legal and professional fees associated with covered loans and OREO declined to $0.5 million for the first quarter of 2015, from $0.9 million for the fourth quarter of 2014 and $1.6 million for the first quarter of 2014. Under the loss-sharing agreements, 80 percent of qualifying legal and professional fees associated with covered loans and OREO are reimbursable by the FDIC and reflected in FDIC loss sharing income (expense), net in the noninterest income section of the consolidated statements of income.

The following table provides a summary of OREO expense for non-covered and covered OREO. Qualifying covered OREO expenses are reimbursable by the FDIC at 80 percent.

	For the three months ended
	March 31,		December 31,		March 31,
(in thousands)	2015		2014		2014
Non-covered OREO expense
Valuation write-downs	$	—	$	—	$	13
Holding costs and foreclosure expense	209		232		107
Total non-covered OREO expense	$	209	$	232	$	120
Covered OREO expense
Valuation write-downs	$	1,662	$	623	$	155
Holding costs and foreclosure expense	860		447		1,158
Total covered OREO expense	$	2,522	$	1,070	$	1,313
Total OREO expense	$	2,731	$	1,302	$	1,433

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Covered Assets

The following table summarizes the components of income and expense related to covered assets for the three months ended March 31, 2015, December 31, 2014 and March 31, 2014:

	For the three months ended
(in thousands)	March 31, 2015			December 31, 2014			March 31, 2014
Interest income on covered loans
Base yield	$	9,876		$	10,330		$	12,528
Income on loans paid-off or fully charged-off	8,387			9,925			9,324
Total interest income on covered loans	$	18,263		$	20,255		$	21,852
Provision for losses on covered loans
Provision for losses on covered loans	$	497		$	46		$	4,655
Noninterest income related to covered assets
FDIC loss sharing expense, net
(Loss) gain on indemnification asset	$	(1,311	)	$	(1,461	)	$	3,599
Indemnification asset amortization	(2,381		)	(2,606		)	(3,164		)
Net FDIC reimbursement for OREO and loan expenses	2,595			1,442			1,653
Removal of indemnification asset for loans paid-off or fully charged-off	(2,061		)	(3,074		)	(2,999		)
Removal of indemnification asset for unfunded loan commitments and loans transferred to OREO	(166		)	(942		)	(676		)
Removal of indemnification asset for OREO and net reimbursement to FDIC for OREO sales	(9		)	(1,441		)	(311		)
Loan recoveries shared with FDIC	(2,498		)	(3,344		)	(4,222		)
Increase in FDIC clawback liability	(857		)	(582		)	(963		)
Total FDIC loss sharing expense, net	(6,688		)	(12,008		)	(7,083		)
Gain on disposal of assets
Net gain on sale of OREO	12			1,800			389
Other income
Net gain on transfers of covered loans to OREO	301			1,539			863
Amortization of fair value on acquired unfunded loan commitments	22			44			215
OREO income	173			67			435
Other	(14		)	(128		)	(156		)
Total other income	482			1,522			1,357
Total noninterest income related to covered assets	$	(6,194	)	$	(8,686	)	$	(5,337	)
Noninterest expense related to covered assets (1)
Other real estate owned
Valuation write-downs	$	1,662		$	623		$	155
Holding costs and foreclosure expense	860			447			1,158
Total other real estate owned	2,522			1,070			1,313
Legal and professional fees	504			949			1,580
Other operating expense
Other covered asset expenses	7			10			19
Total noninterest expense related to covered assets (2)	$	3,033		$	2,029		$	2,912

(1)OREO, legal and professional fees, and other expenses related to covered assets must meet certain FDIC criteria in order for the expense amounts to be reimbursed. Certain amounts reflected in these categories may not be reimbursed by the FDIC.

(2)Excludes personnel and other corporate overhead expenses that the Company incurs to service covered assets and costs associated with the branches acquired in FDIC-assisted acquisitions.

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The Company accounts for its covered loans under ASC 310-30. Loans are accounted for under ASC 310-30 when there is evidence of credit deterioration since origination and for which it is probable, at acquisition, that the Company would be unable to collect all contractually required payments. These loans were recorded at fair value at the time of acquisition. In connection with its FDIC-assisted acquisitions, the Company entered into loss-sharing agreements with the FDIC under which the FDIC will reimburse the Company for 80 percent of eligible losses with respect to covered loans, OREO and unfunded loan commitments. The expected reimbursements under the loss-sharing agreements were recorded as an indemnification asset at their initial estimated fair value on the date of acquisition.

Covered Loan Base Yield and FDIC Indemnification Asset Amortization/Accretion

For covered loans, the excess of cash flows expected to be collected over the carrying value of the underlying acquired impaired loans is referred to as “accretable yield.” The accretion of this amount is recognized in interest income over the expected life of the covered loans and is herein referred to as “base yield.” For the FDIC indemnification asset, the difference between the cash flows the Company expects to collect from the FDIC (“FDIC cash flows”) and the carrying value of the indemnification asset is amortized or accreted into noninterest income up until the expiration date of the FDIC loss sharing. Both the base yield and the amortization or accretion of the indemnification asset are calculated using a level yield method that takes into consideration the remaining life of the covered loans and the terms of the FDIC loss-sharing agreements.

The quarterly review and update of cash flow projections (further discussed below) may adjust the rates used for loan accretion and indemnification asset amortization or accretion. As credit improves, expected loan cash flows will generally improve, resulting in higher accretable yield. Accordingly, as credit improves, expected FDIC cash flows will decrease, resulting in a larger difference between FDIC cash flows and indemnification asset carrying value. Credit improvements generally would result in higher rates of loan accretion and indemnification asset amortization.

The Company recorded base yield on covered loans of $9.9 million in the first quarter of 2015, compared to $10.3 million in the fourth quarter of 2014 and $12.5 million in the first quarter of 2014. The Company recognized indemnification asset amortization expense of $2.4 million in the first quarter of 2015, compared to $2.6 million and $3.2 million for the fourth quarter of 2014 and first quarter of 2014, respectively. The decrease in base yield and indemnification asset amortization expense from prior periods was primarily due to portfolio run-off. Average covered loans were $492.4 million during the first quarter of 2015, down from $530.4 million during the fourth quarter of 2014 and $696.2 million for the year-earlier quarter.

Quarterly Update of Cash Flow Projections

The Company reviews and updates cash flow projections on covered loans and the related FDIC loss-sharing agreements on a quarterly basis. These projections take into consideration such inputs as the contractual terms of the covered loans, the contractual terms of the FDIC loss-sharing agreements, credit assumptions and prepayment assumptions. The quarterly update of cash flow projections impacts the following balance sheet and income statement items:

Balance Sheet Line Item	Corresponding Income Statement Line Item
Covered loans	Base yield in interest income
Allowance for losses on covered loans	(Reversal of) provision for losses on covered loans
FDIC indemnification asset	FDIC loss sharing income or expense, net
	- Gain or loss on indemnification asset
	- Indemnification asset amortization or accretion (on a prospective basis)
FDIC clawback liability	FDIC loss sharing income or expense, net
	- Increase or decrease in FDIC clawback liability

Generally, for covered loans, decreases in estimated loan cash flows over those expected at the acquisition date and subsequent measurement periods are recognized by recording a provision for losses on covered loans. Decreases in estimated loan cash flows are typically accompanied by higher expected losses which would result in increases in FDIC cash flows. Increases in expected FDIC cash flows are recognized as gains on the FDIC indemnification asset.

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Increases in estimated loan cash flows over those expected at the acquisition date and subsequent measurement periods are recognized as interest income, prospectively, after previously recorded allowances are reversed. Increases in estimated loan cash flows are typically accompanied by lower expected losses which would result in decreases in FDIC cash flows. Decreases in expected FDIC cash flows are recognized as indemnification asset amortization expense on a prospective basis, after previously recorded gains on the indemnification asset have been reversed.

The FDIC clawback liability represents contingent consideration expected to be paid to the FDIC. The Company is required to reimburse the FDIC if actual cumulative losses are lower than the adjusted intrinsic losses contractually set forth in the FDIC loss-sharing agreements. The total FDIC clawback liability may increase as actual and expected losses decrease. The liability to the FDIC may decrease if actual and expected losses grow. The Company measures the FDIC clawback liability at fair value.

The Company recorded a $0.5 million provision for losses on covered loans in the first quarter of 2015, compared to provision for losses of $46 thousand in the fourth quarter of 2014 and $4.7 million in the first quarter of 2014. Loss on indemnification asset was $1.3 million for the first quarter of 2015, compared to a loss of $1.5 million for the fourth quarter of 2014 and a gain of $3.6 million for the first quarter of 2014. Expense from the increase in FDIC clawback liability was $0.9 million, $0.6 million and $1.0 million for the first quarter of 2015, fourth quarter of 2014 and first quarter of 2014, respectively. The provision for losses on covered loans, the gain on indemnification asset and the change in FDIC clawback liability are the result of changes, both in amount and timing, in expected loan cash flows and FDIC cash flows due to actual loan performance and the Company’s revised loan loss and prepayment forecasts. During the first quarter of 2015, the overall expected lifetime cash flows of the covered loan portfolio improved, but the change in amount and timing of the cash flows as well as the varying performance among different pools resulted in the recognition of a net provision for losses on covered loans and a net loss on indemnification asset. The increase in the FDIC clawback liability was driven by an overall improvement in portfolio credit.

The revisions of the loss forecasts were based on the results of management’s review of market conditions, the credit quality of the outstanding covered loans and loan performance data since the acquisition of covered loans. The Company will continue updating cash flow projections on covered loans and related FDIC loss-sharing agreements on a quarterly basis. Due to the uncertainty in the future performance of the covered loans, additional provision expense or provision reversal, gain or loss on indemnification asset, and changes in FDIC clawback liability may be recognized in future periods.

Covered Asset Removals

A covered asset removal event occurs when a loan is paid off, fully charged off, sold or transferred to OREO, or when OREO is liquidated. The difference between the carrying value of the covered asset and the cash or non-cash proceeds received upon its removal is recognized as a gain or loss in the income statement. The gain or loss on covered loans that are paid off and fully charged off, also referred to as “net accelerated accretable yield recognition,” is recorded in interest income. Gain or loss recognized on the transfer of covered loans to OREO is calculated as the difference between the carrying value of the covered loan and the fair value of the underlying foreclosed collateral, and is recognized in other noninterest income. The Company also recognizes gains and losses from the sale of covered OREO through noninterest income.

When a covered asset is removed, the FDIC indemnification asset associated with the covered asset is also removed. The FDIC indemnification asset balance associated with unfunded loan commitments is also removed when an unfunded commitment has been funded. The difference between the FDIC indemnification asset and the expected payment from the FDIC for the removed asset represents the expense or income on removal of the indemnification asset. These amounts are recognized in FDIC loss sharing income or expense.

Interest income from net accelerated accretable yield recognition decreased to $8.4 million in the first quarter of 2015, compared to $9.9 million in the fourth quarter of 2014 and $9.3 million in the year-earlier quarter. The net expense from the removal of indemnification asset for loans that were paid off or fully charged off was $2.1 million, $3.1 million and $3.0 million in the first quarter of 2015, fourth quarter of 2014 and first quarter of 2014, respectively. The decrease in both balances in the first quarter of 2015 was due to lower volumes of covered loans that were paid off or fully charged off.

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Net gain on transfers of covered loans to OREO was $0.3 million in the first quarter of 2015, compared to $1.5 million for the fourth quarter of 2014 and $0.9 million in the year-earlier quarter. The transfer of covered loans to OREO has declined as a result of improvements in the portfolio’s credit quality and general market conditions. Net gain on sale of covered OREO was $12 thousand in the first quarter of 2015, a decrease from $1.8 million in the fourth quarter of 2014 and $0.4 million in the year-earlier quarter. Total net expense from the removal of the indemnification asset for all other covered asset removals, excluding the removal of indemnification asset for loans that were paid off or fully charged off, was $0.2 million in the first quarter of 2015, $2.4 million in the fourth quarter of 2014 and $1.0 million in the year-earlier quarter. The decrease in net gain on sale of covered OREO and related expense from the indemnification asset recognized in the first quarter of 2015 was driven by lower OREO sale volume.

Loan recoveries on previously charged-off covered loans are also shared with the FDIC. The portion that is payable to the FDIC is recognized as “Loan recoveries shared with FDIC” under FDIC loss sharing income or expense. The Company recognized expenses of $2.5 million in the first quarter of 2015, $3.3 million in the fourth quarter of 2014 and $4.2 million in the year-earlier quarter. The Company has recognized significant loan recoveries in the last several years as a result of increases in the value of real estate collateral and improvements in the financial condition of borrowers or guarantors.

Other Expenses

Noninterest expense related to covered assets includes OREO expense, legal and professional expense, and other covered asset expenses. These expenses are subject to FDIC reimbursement, but must meet certain FDIC criteria in order to be reimbursed. Certain amounts reflected in the table above may not be reimbursable by the FDIC. The FDIC reimbursements related to qualified expenses are recognized as income in “Net FDIC reimbursement for OREO and loan expenses” under FDIC loss sharing income or expense.

Total OREO expense, which includes valuation write-downs, holding costs and foreclosure expenses was $2.5 million for the first quarter of 2015, up from $1.1 million for the fourth quarter of 2014 and $1.3 million for the year-earlier quarter. The increase in total OREO expense from the prior periods was primarily due to higher valuation write-downs during the first quarter of 2015. Legal and professional fees related to covered assets were $0.5 million in the first quarter of 2015, down from $0.9 million in the fourth quarter of 2014 and $1.6 million in the year-earlier quarter. Net FDIC reimbursement for these expenses of $2.6 million for the first quarter of 2015 increased from $1.4 million for the fourth quarter of 2014 and $1.7 million for the first quarter of 2014.

Other Information on the FDIC Indemnification Asset

The following table is a summary of activity in the FDIC indemnification asset for the three months ended March 31, 2015 and 2014:

	For the three months ended
	March 31,
(in thousands)	2015			2014
Balance, beginning of period	$	50,511		$	89,227
Indemnification asset amortization	(2,381		)	(3,164		)
(Loss) gain on indemnification asset	(1,311		)	3,599
Reductions (1)	(3,563		)	(4,811		)
Balance, end of period	$	43,256		$	84,851

(1)The FDIC indemnification asset is reduced upon covered asset removals, funding of covered unfunded loan commitments, partial charge-offs and OREO write-downs.

The indemnification asset amortization, gain on indemnification asset, and the impact of the reduction of indemnification asset for covered asset removals and funding of unfunded commitments are recognized in the FDIC loss sharing income or expense line item on the consolidated statements of income.

When a covered asset is charged off or written down and is subject to FDIC reimbursement under the FDIC loss-sharing agreements, the Company records the estimated amount of reimbursement in an FDIC receivable account, which is classified in the Other Assets line of the consolidated balance sheet.

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Segment Operations

The Company’s reportable segments are Commercial and Private Banking, Wealth Management and Other. For a more complete description of the segments, including summary financial information, see Note 18, Segment Results, of the Notes to the Unaudited Consolidated Financial Statements.

Commercial and Private Banking

Net income for the Commercial and Private Banking segment increased to $44.2 million for the first quarter of 2015 from $39.1 million for the first quarter of 2014. The increase in net income from the prior-year period was primarily due to higher net interest income and noninterest income, and lower provision for credit losses on covered loans. These increases in net income were partially offset by an increase in noninterest expense compared to the first quarter of 2014.

Net interest income increased to $207.8 million for the first quarter of 2015 from $189.7 million for the year-earlier quarter. The increase was primarily attributable to organic loan growth, as average non-covered loans and leases in the segment grew 18 percent to $20.35 billion for the first quarter of 2015 from $17.28 billion for the same period in 2014. The increase in interest income from loans was partially offset by lower income from net accelerated accretable yield recognition on covered loans that were paid off or fully charged off and covered portfolio run-off. Average covered loans decreased to $492.4 million for the current quarter from $696.2 million for the first quarter of 2014.

The growth in net interest income was also a result of continued core deposit growth. The Asset Liability Funding Center (“Funding Center”), which is used for funds transfer pricing, pays the business line units for generating deposits. Average deposits for this segment increased by 10 percent to $27.55 billion for the first quarter of 2015 from $25.05 billion for the year-earlier quarter, driven by new client relationships and growth in deposits of existing clients.

The segment recorded no provision for credit losses on loans and leases, excluding covered loans, in the first quarters of 2015 and 2014. Provision for losses on covered loans decreased to $0.5 million for the three months ended March 31, 2015, from $4.7 million for the three months ended March 31, 2014. Refer to “Results of Operations—Provision for Credit Losses” and “Balance Sheet Analysis—Loan and Lease Portfolio—Asset Quality” included elsewhere in this report for further discussion of the provision. Refer to “Results of Operations—Covered Assets” included elsewhere in this report for further discussion of the provision for losses on covered loans.

Noninterest income for the first quarter of 2015 was $51.5 million, up 9 percent from $47.1 million for the prior-year quarter. The increase compared to the year-earlier period was largely due to higher wealth management fee income, as revenues associated with wealth management products and services utilized by Commercial and Private Banking clients are allocated to this segment. Also contributing to the increase was higher credit card fee income and income from client swap transactions in the first quarter of 2015.

Noninterest expense, including depreciation and amortization, was $192.6 million for the three months ended March 31, 2015, up 13 percent from $170.5 million for the year-earlier quarter. The increase was primarily due to higher salaries and employee benefit expenses, higher OREO expense on covered loans and higher FDIC assessments.

Wealth Management

The Wealth Management segment had net income attributable to City National Corporation of $12.6 million for the first quarter of 2015, up from net income of $5.9 million for the year-earlier quarter. Noninterest income increased 18 percent to $75.1 million for the first quarter of 2015 from $63.6 million for the year-earlier quarter. The increase from the prior-year period was mainly due to higher wealth management fees, driven by asset inflows from new and existing clients and market appreciation. Noninterest income in the current quarter also included receipt of $5.0 million in life insurance proceeds associated with an insurable event at one of the Company’s investment affiliates. Refer to “Results of Operations—Noninterest Income—Wealth Management” included elsewhere in this report for further discussion of the factors impacting income for the Wealth Management segment.

Noninterest expense, including depreciation and amortization, was $56.5 million for the first quarter of 2015, an increase of 5 percent from $54.0 million for the year-earlier quarter. The increase in expense for the first three months of 2015 compared with the year-earlier period was primarily due to higher incentive compensation expense and higher sub-advisory expenses associated with asset growth in advised funds.

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Other

Net income for the Other segment decreased to $4.7 million for the first quarter of 2015 from $8.8 million for the first quarter of 2014. The decrease in net income was due to lower noninterest income, lower net interest income and higher depreciation and amortization expense, partially offset by lower noninterest expense.

Net interest income was $7.9 million for the three months ended March 31, 2015, down from $9.8 million for the same period in 2014. The Funding Center, which is included in the Other segment, charges the business line units for loans and pays them for generating deposits. During the first quarter of 2015, funding credit given to the Commercial and Private Banking segment increased compared with the year-earlier quarter due to higher average deposit balances. Also, funding charges applied to loan balances in the lending units remain low due to the low interest rate environment. Both of these circumstances resulted in lower net interest income in the Other segment and higher net interest income in the Commercial and Private Banking segment. The decrease in net interest income in the Other segment was partially offset by lower interest expense from the redemption of $105.0 million in subordinated notes during the third quarter of 2014.

Noninterest income (loss) was ($15.5) million for the current quarter compared with ($9.5) million for the first quarter of 2014. Noninterest expense (income), including depreciation and amortization was ($14.6) million for the three months ended March 31, 2015, compared with ($13.6) million for the same period in 2014. The change in noninterest income (loss) and expense (income) for the three months ended March 31, 2105 compared with the same period in 2014 was primarily due to an increase in the elimination of inter-segment revenues and costs (recorded in the Other segment) associated with wealth management products and services compared to the year-earlier periods. Also contributing to the change in noninterest expense was an increase in depreciation and amortization expense related to fixed assets and software and $3.2 million in transaction costs related to the planned merger with RBC during the first quarter of 2015.

Income Taxes

The Company recognized income tax expense of $30.6 million during the first quarter of 2015, compared with tax expense of $34.0 million in the fourth quarter of 2014 and $31.0 million in the year-earlier quarter. The effective tax rate was 33.0 percent of pretax income for the first quarter of 2015, compared with 33.9 percent for the fourth quarter of 2014 and 36.3 percent for the year-earlier quarter. The lower tax rate during the first quarter of 2015, when compared to the year-earlier quarter was attributable to higher tax-exempt interest income in the current year. The effective tax rates differ from the applicable statutory federal and state tax rates due to various factors, including tax benefits from investments in affordable housing partnerships, tax-exempt income on municipal bonds, bank-owned life insurance and other adjustments.

Income tax expense and effective tax rates for prior periods reflect the retrospective adoption of Accounting Standards Update 2014-01, Investments—Equity Method and Joint Ventures (Topic 323), Accounting for Investments in Qualified Affordable Housing Projects (“ASU 2014-01”) on January 1, 2015. See Note 1, Summary of Significant Accounting Policies, of the Notes to the Unaudited Consolidated Financial Statements for further discussion of ASU 2014-01.

See Note 13, Income Taxes, of the Notes to the Unaudited Consolidated Financial Statements for further discussion of income taxes.

BALANCE SHEET ANALYSIS

Total assets were $32.70 billion at March 31, 2015, an increase of 10 percent from $29.73 billion at March 31, 2014 and up slightly from $32.60 billion at December 31, 2014. Average assets for the first quarter of 2015 increased 10 percent to $32.26 billion from $29.41 billion for the first quarter of 2014. Total average interest-earning assets for the first quarter of 2015 were $30.52 billion, up 10 percent from $27.64 billion for the first quarter of 2014. The increase in assets from the year-earlier quarter primarily reflects higher loan balances.

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Securities

At March 31, 2015, the Company had total securities of $8.73 billion, comprised of securities available-for-sale at fair value of $5.21 billion, securities held-to-maturity at amortized cost of $3.41 billion and trading securities at fair value of $102.5 million. The Company had total securities of $9.48 billion at December 31, 2014, comprised of securities available-for-sale at fair value of $5.88 billion, securities held-to-maturity at amortized cost of $3.43 billion and trading securities at fair value of $173.2 million. At March 31, 2014, the Company had total securities of $8.65 billion, comprised of securities available-for-sale at fair value of $5.39 billion, securities held-to-maturity at amortized cost of $3.20 billion and trading securities at fair value of $61.6 million. The decrease in securities available-for-sale since year-end 2014 reflects the Company’s strategy to fund loan growth with cash flow from the securities portfolio to the extent possible.

The following is a summary of amortized cost and estimated fair value for the major categories of securities available-for-sale and held-to-maturity:

	March 31, 2015				December 31, 2014				March 31, 2014
	Amortized				Amortized				Amortized
(in thousands)	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
Securities available-for-sale:
U.S. Treasury	$	115,893	$	115,907	$	116,919	$	116,926	$	185,275	$	185,313
Federal agency - Debt	1,219,481		1,220,220		1,401,303		1,398,581		756,828		753,689
Federal agency - MBS	99,891		101,515		102,939		104,526		124,698		125,613
CMOs - Federal agency	3,204,823		3,204,886		3,599,831		3,580,590		3,715,837		3,689,946
CMOs - Non-agency	23,147		22,811		24,385		24,014		36,773		36,348
State and municipal	421,419		427,458		473,272		479,031		398,960		406,897
Other debt securities	115,006		116,441		174,352		176,169		174,907		178,408
Total available-for-sale debt securities	5,199,660		5,209,238		5,893,001		5,879,837		5,393,278		5,376,214
Equity securities and mutual funds	1,341		1,150		1,508		3,146		787		10,540
Total available-for-sale securities	$	5,201,001	$	5,210,388	$	5,894,509	$	5,882,983	$	5,394,065	$	5,386,754
Securities held-to-maturity (1):
Federal agency - Debt	$	286,581	$	296,432	$	292,932	$	299,107	$	265,071	$	262,101
Federal agency - MBS	556,931		576,710		553,589		564,741		450,334		446,600
CMOs - Federal agency	1,766,325		1,811,846		1,811,574		1,831,280		1,867,099		1,839,121
State and municipal	717,937		739,211		682,705		703,440		522,104		519,051
Other debt securities	86,032		86,354		86,231		86,079		98,389		98,195
Total held-to-maturity securities	$	3,413,806	$	3,510,553	$	3,427,031	$	3,484,647	$	3,202,997	$	3,165,068

(1) Securities held-to-maturity are presented in the consolidated balance sheets at amortized cost.

The average duration of the $5.21 billion available-for-sale portfolio was 1.8 years at March 31, 2015, down from 2.3 years at March 31, 2014 and 2.0 years at December 31, 2014. The decrease in average duration reflects a continued rotation from longer-duration to shorter-duration securities in the available-for-sale portfolio.

Changes in the fair value of securities available-for-sale will impact other comprehensive income, and thus shareholders’ equity, on an after-tax basis. Securities held-to-maturity are presented in the consolidated balance sheets at amortized cost. Changes in the fair value of securities held-to-maturity do not have an impact on other comprehensive income. At March 31, 2015, the available-for-sale securities portfolio had a net unrealized gain of $9.4 million, consisting of $33.7 million of unrealized gains and $24.3 million of unrealized losses. At December 31, 2014, the available-for-sale securities portfolio had a net unrealized loss of $11.5 million, comprised of $32.8 million of unrealized gains and $44.3 million of unrealized losses. At March 31, 2014, the available-for-sale securities portfolio had a net unrealized loss of $7.3 million, comprised of $53.9 million of unrealized gains and $61.2 million of unrealized losses. The decrease in the net unrealized loss at March 31, 2015 compared to December 31, 2014 and March 31, 2014 was due to lower interest rates and other market conditions that, in general, resulted in higher market prices for the securities owned.

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The following table provides the expected remaining maturities of debt securities included in the securities portfolio at March 31, 2015, except for maturities of mortgage-backed securities which are allocated according to the average life of expected cash flows. Average expected maturities will differ from contractual maturities because of the amortizing nature of the loan collateral and prepayment behavior of borrowers.

(in thousands)	One year or  less		Over 1 year  through 5 years		Over 5 years through 10 years		Over 10  years		Total
Securities available-for-sale:
U.S. Treasury	$	98,400	$	17,507	$	—	$	—	$	115,907
Federal agency - Debt	597,445		622,775		—		—		1,220,220
Federal agency - MBS	—		83,971		17,544		—		101,515
CMOs - Federal agency	157,341		3,047,545		—		—		3,204,886
CMOs - Non-agency	1,381		21,430		—		—		22,811
State and municipal	171,999		252,104		—		3,355		427,458
Other	57,142		59,299		—		—		116,441
Total debt securities available-for-sale	$	1,083,708	$	4,104,631	$	17,544	$	3,355	$	5,209,238
Amortized cost	$	1,081,124	$	4,097,536	$	17,600	$	3,400	$	5,199,660
Securities held-to-maturity:
Federal agency - Debt	$	—	$	—	$	132,829	$	153,752	$	286,581
Federal agency - MBS	—		49,153		503,264		4,514		556,931
CMOs - Federal agency	—		867,361		898,964		—		1,766,325
State and municipal	—		177,608		454,244		86,085		717,937
Other	—		86,032		—		—		86,032
Total debt securities held-to-maturity at amortized cost	$	—	$	1,180,154	$	1,989,301	$	244,351	$	3,413,806

Impairment Assessment

The Company performs a quarterly assessment of the debt and equity securities held in its investment portfolio to determine whether a decline in fair value below amortized cost is other-than-temporary. If a decline in fair value is determined to be other-than-temporary, the cost basis of the individual security is written down to fair value which then becomes the security’s new cost basis. The new cost basis is not adjusted for subsequent recoveries in fair value.

The Company recorded impairment losses in earnings on securities available-for-sale of $0.1 million for the three months ended March 31, 2015. There were no impairment losses recognized in earnings for the three months ended March 31, 2014. The Company recognized an after-tax amount of $0.1 million of non-credit-related other-than-temporary impairment in accumulated other comprehensive income or loss (“AOCI”) on securities available-for-sale at March 31, 2015. There was no non-credit related other-than-temporary impairment recognized in AOCI on securities available-for-sale at March 31, 2014. No impairment losses were recognized in earnings or AOCI for securities held-to-maturity during the three months ended March 31, 2015 and 2014.

Of the total securities available-for-sale in an unrealized loss position at March 31, 2015, approximately $1.2 billion of securities with unrealized losses of $2.7 million were in a continuous unrealized loss position for less than 12 months, and $1.27 billion of securities with unrealized losses of $21.6 million were in a continuous loss position for more than 12 months. Securities in a loss position and total gross unrealized losses were comprised mostly of federal agency CMOs and federal agency debt securities. At December 31, 2014, approximately $2.03 billion of securities with unrealized losses of $6.7 million were in a continuous unrealized loss position for less than 12 months and $1.47 billion of securities with unrealized losses of $37.6 million were in a continuous loss position for more than 12 months. At March 31, 2014, approximately $1.84 billion of securities with unrealized losses of $26.4 million were in a continuous unrealized loss position for less than 12 months and $857.4 million of securities with unrealized losses of $34.8 million were in a continuous loss position for more than 12 months.

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See Note 3, Securities, of the Notes to the Unaudited Consolidated Financial Statements for further disclosures related to the securities portfolio.

Loan and Lease Portfolio

A comparative period-end loan and lease table is presented below:

Loans and Leases

	March 31,			December 31,			March 31,
(in thousands)	2015			2014			2014
Commercial	$	9,455,621		$	9,360,976		$	7,960,460
Commercial real estate mortgages	3,737,137			3,539,703			3,280,868
Residential mortgages	5,299,947			5,106,803			4,682,055
Real estate construction	794,274			710,224			389,188
Home equity loans and lines of credit	791,731			785,796			691,338
Installment	186,076			184,613			150,895
Lease financing	645,569			649,091			596,581
Loans and leases, excluding covered loans	20,910,355			20,337,206			17,751,385
Less: Allowance for loan and lease losses	(308,858		)	(310,149		)	(305,790		)
Loans and leases, excluding covered loans, net	20,601,497			20,027,057			17,445,595
Covered loans	480,236			510,979			673,294
Less: Allowance for loan losses	(9,752		)	(8,608		)	(18,439		)
Covered loans, net	470,484			502,371			654,855
Total loans and leases.	$	21,390,591		$	20,848,185		$	18,424,679
Total loans and leases, net	$	21,071,981		$	20,529,428		$	18,100,450

Total loans and leases were $21.39 billion, $20.85 billion and $18.42 billion at March 31, 2015, December 31, 2014 and March 31, 2014, respectively. Total loans, excluding covered loans, were $20.91 billion, $20.34 billion and $17.75 billion at March 31, 2015, December 31, 2014 and March 31, 2014, respectively.

Total loans and leases, excluding covered loans, at March 31, 2015 increased 3 percent from December 31, 2014 and 18 percent from March 31, 2014. Commercial loans, including lease financing, were up 1 percent from year-end 2014 and 18 percent from the year-earlier quarter. Commercial real estate mortgage loans increased 6 percent from year-end 2014 and 14 percent from the year-earlier quarter. Residential mortgages grew by 4 percent and 13 percent from the same periods, respectively. Real estate construction loans increased 12 percent from year-end 2014 and 104 percent from March 31, 2014.

Covered Loans

Covered loans represent loans acquired from the FDIC that are subject to loss-sharing agreements and were $480.2 million as of March 31, 2015, $511.0 million as of December 31, 2014 and $673.3 million as of March 31, 2014. Covered loans, net of allowance for loan losses, were $470.5 million as of March 31, 2015, $502.4 million as of December 31, 2014 and $654.9 million as of March 31, 2014. The following is a summary of the major categories of covered loans:

	March 31,			December 31,			March 31,
(in thousands)	2015			2014			2014
Commercial	$	2,153		$	1,969		$	9,766
Commercial real estate mortgages	453,647			481,689			625,404
Residential mortgages	3,715			4,455			4,926
Real estate construction	16,813			18,790			29,582
Home equity loans and lines of credit	3,655			3,820			3,313
Installment	253			256			303
Covered loans	480,236			510,979			673,294
Less: Allowance for loan losses	(9,752		)	(8,608		)	(18,439		)
Covered loans, net	$	470,484		$	502,371		$	654,855

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Other

To grow loans and diversify and manage concentration risk of the Company’s loan portfolio, the Company purchases and sells participations in loans. Included in this portfolio are purchased participations in Shared National Credits (“SNC”). Purchased SNC commitments at March 31, 2015 totaled $4.33 billion or 14 percent of total loan commitments, compared to $4.22 billion or 14 percent at December 31, 2014 and $3.52 billion or 13 percent at March 31, 2014. Outstanding loan balances on purchased SNCs were $2.07 billion, or approximately 10 percent of total loans outstanding, excluding covered loans, at March 31, 2015, compared to $1.96 billion or 10 percent at December 31, 2014 and $1.63 billion or 9 percent at March 31, 2014.

Bank regulatory guidance on risk management practices for financial institutions with high or increasing concentrations of commercial real estate (“CRE”) loans on their balance sheets emphasizes the need for sound internal risk management practices for those institutions that have experienced rapid growth in CRE lending, have notable exposure to specific types of CRE, or are approaching or exceeding the supervisory criteria used to evaluate CRE concentration risk. The supervisory criteria are: total reported loans for construction, land development and other land represent 100 percent of the institution’s total risk-based capital, and both total CRE loans represent 300 percent or more of the institution’s total risk-based capital and the institution’s CRE loan portfolio has increased 50 percent or more within the last 36 months. As of March 31, 2015, total loans for construction, land development and other land represented 28 percent of total risk-based capital; total CRE loans represented 133 percent of total risk-based capital and the total portfolio of loans for construction, land development, other land and CRE increased 20 percent over the last 36 months.

Asset Quality

Credit Risk Management

The Company has a comprehensive methodology to monitor credit quality and prudently manage credit concentration within each portfolio. The methodology includes establishing concentration limits to ensure that the loan portfolio is diversified. The limits are evaluated quarterly and are intended to mitigate the impact of any segment on the Company’s capital and earnings. The limits cover major industry groups, geography, product type, loan size and client relationship. Additional sub-limits are established for certain industries where the Bank has higher exposure. The concentration limits are approved by the Bank’s Credit Policy Committee and reviewed annually by the Audit & Risk Committee of the Board of Directors.

The loan portfolios are monitored through delinquency tracking and a dynamic risk rating process that is designed to detect early signs of deterioration. In addition, once a loan has shown signs of deterioration, it is transferred to a Special Assets Department that consists of professionals who specialize in managing problem assets. An oversight group meets quarterly or more frequently to review the progress of problem loans and OREO. Also, the Company has established portfolio review requirements that include a periodic review and risk assessment by the Risk Management Division that reports to the Audit & Risk Committee of the Board of Directors.

Geographic Concentrations and Economic Trends by Geographic Region

Although the Company’s lending activities are predominantly in California, and to a lesser extent, New York, the Company has various specialty lending businesses that lend to businesses located throughout the United States of America and in certain foreign countries to facilitate trade finance activities. Excluding covered loans, California represented 73 percent of total loans outstanding and New York represented 9 percent as of March 31, 2015. The remaining 18 percent of total loans outstanding represented other states and countries. Concentrations of credit risk arise when a number of clients are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company has a diversified loan portfolio, a substantial portion of the loan portfolio and credit performance depends on the economic stability of California. The Company has most of its loans in large metropolitan California cities such as Los Angeles, San Francisco and San Diego, rather than in the outlying suburban communities that have seen higher declines in real estate values during the recession. Within the Company’s Commercial loan portfolio, the five California counties with the largest exposures at March 31, 2015 are Los Angeles (37 percent), Orange (5 percent), San Diego (3 percent), Riverside (3 percent) and San Bernardino (2 percent). Within the Commercial Real Estate Mortgage loan portfolio, the five California counties with the largest exposures are Los Angeles (38 percent), San Diego (8 percent), Orange (7 percent), Riverside (4 percent) and Santa Clara (4 percent). For the Real Estate Construction loan portfolio, the concentration

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in California is predominately in Los Angeles (29 percent), San Diego (15 percent), Orange (8 percent), Alameda (7 percent) and Ventura (6 percent).

Within the Company’s covered loan portfolio at March 31, 2015, the five states with the largest concentration were California (32 percent), Texas (12 percent), Nevada (6 percent), Arizona (6 percent) and Ohio (6 percent). The remaining 38 percent of total covered loans outstanding represented other states.

Allowance for Loan and Lease Losses and Reserve for Off-Balance Sheet Credit Commitments

A consequence of lending activities is that losses may be experienced. The amount of such losses will vary from time to time depending upon the risk characteristics of the loan portfolio as affected by economic conditions, changing interest rates, and the financial performance of borrowers. The allowance for loan and lease losses and the reserve for off-balance sheet credit commitments which provide for the risk of losses inherent in the credit extension process, are increased by the provision for credit losses charged to operating expense. The allowance for loan and lease losses is decreased by the amount of charge-offs, net of recoveries. There is no exact method of predicting specific losses or amounts that ultimately may be charged off on particular segments of the loan portfolio.

The Company has an internal credit risk analysis and review staff that issues reports to the Audit & Risk Committee of the Board of Directors and continually reviews loan quality. This analysis includes a detailed review of the classification and categorization of problem loans, potential problem loans and loans to be charged off, an assessment of the overall quality and collectability of the portfolio, consideration of the credit loss experience, trends in problem loans and concentration of credit risk, as well as current economic conditions, particularly in California. Management then evaluates the allowance, determines its appropriate level and the need for additional provisions, and presents its analysis to the Audit & Risk Committee which ultimately reviews and approves management’s recommendation.

The provision is the expense recognized in the consolidated statements of income to adjust the allowance and reserve to the level deemed appropriate by management, as determined through application of the Company’s allowance methodology procedures. See “Critical Accounting Policies—Allowance for Loan and Lease Losses and Reserve for Off-Balance Sheet Credit Commitments” in the Company’s 2014 Annual Report on Form 10-K. The process used for determining the adequacy of the reserve for off-balance sheet credit commitments is consistent with the process for the allowance for loan and lease losses.

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The following table summarizes activity in the allowance for loan and lease losses and the reserve for off-balance sheet credit commitments, excluding covered loans, for the three months ended March 31, 2015 and 2014. Activity is provided by loan portfolio segment which is consistent with the Company’s methodology for determining the allowance for loan and lease losses.

Changes in Allowance for Loan and Lease Losses

	For the three months ended
	March 31,
(in thousands)	2015			2014
Loans and leases outstanding, excluding covered loans	$	20,910,355		$	17,751,385
Average loans and leases outstanding, excluding covered loans	$	20,404,720		$	17,338,419
Allowance for loan and lease losses (1)
Balance, beginning of period	$	310,149		$	302,584
Loan charge-offs:
Commercial	(2,825		)	(1,959		)
Commercial real estate mortgages	—			(5		)
Residential mortgages	—			(482		)
Home equity loans and lines of credit	—			(16		)
Installment	(277		)	(46		)
Total charge-offs	(3,102		)	(2,508		)
Recoveries of loans previously charged-off:
Commercial	1,116			1,732
Commercial real estate mortgages	1,160			100
Residential mortgages	39			35
Real estate construction	87			4,388
Home equity loans and lines of credit	38			159
Installment	220			264
Total recoveries	2,660			6,678
Net (charge-offs) recoveries	(442		)	4,170
Transfers to reserve for off-balance sheet credit commitments	(849		)	(964		)
Balance, end of period	$	308,858		$	305,790
Net (charge-offs) recoveries to average loans and leases, excluding covered loans (annualized)	(0.01		)%	0.10		%
Allowance for loan and lease losses to total period-end loans and leases, excluding covered loans	1.48		%	1.72		%
Reserve for off-balance sheet credit commitments
Balance, beginning of period	$	27,811		$	33,944
Transfers from allowance	849			964
Balance, end of period	$	28,660		$	34,908

(1) The allowance for loan and lease losses in this table excludes amounts related to covered loans.

During the economic recession, the Company recognized significant charge-offs from 2008 to 2010. Total loan charge-offs have declined significantly in recent years due to improving economic and business conditions in the markets served by the Company. Higher loan recoveries in recent years were largely due to increases in the value of real estate collateral, improvements in the financial condition of the Company’s clients and guarantors, and increases in recoveries related to the use of legal remedies available to the Company. Recoveries occurred throughout the loan portfolio; however, the majority of the recoveries related to a small group of credit relationships and were primarily concentrated in the commercial and real estate construction portfolios.

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The timing and amount of recoveries is inherently uncertain, imprecise and potentially volatile and is subject to a variety of factors, including but not limited to: general economic conditions, the willingness and financial capacity of the borrower, guarantors or third parties; additional changes in the realizable value of the collateral between the date of charge-off and the date of recovery, and the legal remedies available to the Company needed to effect recovery.

The Company anticipates the level of recoveries to significantly diminish in the foreseeable future as the amount of charge-offs that are available for recovery is significantly less than in prior periods and the charge-offs which remain have fewer opportunities for recovery due to the limited financial capacity and collateral value of the remaining charged-off loans.

Based on an evaluation of individual credits, previous loan and lease loss experience, management’s evaluation of the current loan portfolio, and current economic conditions, management has allocated the allowance for loan and lease losses on non-covered loans for March 31, 2015, December 31, 2014 and March 31, 2014 as shown in the table below:

	Allowance amount						Percentage of total allowance
	March 31,		December 31,		March 31,		March 31,		December 31,		March 31,
(in thousands)	2015		2014		2014		2015		2014		2014
Commercial and lease financing	$	120,666	$	115,855	$	121,574	39	%	37	%	39	%
Commercial real estate mortgages	47,017		44,745		51,361		15		15		17
Residential mortgages	9,967		10,296		11,595		3		3		4
Real estate construction	10,234		9,115		6,468		3		3		2
Home equity loans and lines of credit	6,361		6,609		6,419		2		2		2
Installment	2,153		2,228		1,824		1		1		1
Qualitative	112,460		121,301		106,549		37		39		35
Total	$	308,858	$	310,149	$	305,790	100	%	100	%	100	%

While the allowance is allocated by loan type above, the allowance is general in nature and is available for the portfolio in its entirety.

The Company has a qualitative factor matrix to determine the amount of reserves needed for judgmental factors that are not attributable to or reflected in the Company’s quantitative allowance models. The methodology to determine the qualitative reserves includes segmenting the Company’s portfolio into three loan categories: Commercial real estate secured, Commercial and Consumer. The qualitative reserve factors are separated into numerically informed and judgmental categories. Numerically informed factors are linked to defined macroeconomic or bank-specific criteria such as portfolio growth, problem loan trends and concentrations. Judgmental factors are based on the Company’s assessment of factors that include, but are not limited to, the legal and regulatory environment, internal systems and procedures, and entry into a new business. Each factor is assigned a risk level and a risk weight in points which is aggregated to determine the level of qualitative reserves. The factors are updated quarterly to reflect changing conditions. At March 31, 2015, the Company had total qualitative reserves of $112.5 million, of which $31.3 million, $57.9 million and $23.3 million were assigned to the Commercial real estate secured, Commercial and Consumer segments, respectively. The primary drivers of the qualitative reserves as of March 31, 2015 are economic conditions, loan and industry concentrations, and loan growth. The Company had total qualitative reserves of $121.3 million and $106.5 million as of December 31, 2014 and March 31, 2014, respectively.

Nonaccrual loans, excluding covered loans, were $33.4 million at March 31, 2015, down from $42.2 million at December 31, 2014 and $71.2 million at March 31, 2014. Net loan charge-offs were $0.4 million for the three months ended March 31, 2015, compared to net recoveries of $4.2 million for the same period in 2014. Classified loans were $208.8 million at March 31, 2015, up from $190.8 million at December 31, 2014 but down from $350.7 million at March 31, 2014. The Company recorded no provision for loan and lease losses in the first quarter of 2015 and 2014. The Company recorded a $5.0 million reversal of provision in the fourth quarter of 2014. The reversal of provision in prior quarter reflected substantial loan-loss recoveries and improving credit quality.

The allowance for loan and lease losses, excluding covered loans, was $308.9 million as of March 31, 2015, compared with $310.1 million as of December 31, 2014 and $305.8 million as of March 31, 2014. The ratio of the allowance for loan and lease losses as a percentage of total loans and leases, excluding covered loans, was 1.48 percent at March 31, 2015, compared to 1.53 percent at December 31, 2014 and 1.72 percent at March 31, 2014. The allowance for loan and lease losses as a percentage of nonperforming assets, excluding covered assets, was 785.24 percent, 586.26 percent and 379.12 percent at March 31, 2015, December 31, 2014 and March 31, 2014, respectively. The Company believes that its allowance for loan and lease losses continues to be appropriate.

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The following table summarizes the activity in the allowance for loan losses on covered loans for the three months ended March 31, 2015 and 2014:

	For the three months ended March 31,
(in thousands)	2015		2014
Balance, beginning of period	$	8,608	$	15,922
Provision for losses	497		4,655
Change in allowance due to loan removals	647		(2,138		)
Balance, end of period	$	9,752	$	18,439

The allowance for losses on covered loans was $9.8 million at March 31, 2015, down from $18.4 million at March 31, 2014 due to the stabilizing credit quality of covered loans and portfolio run-off. The covered loan portfolio decreased 29 percent to $480.2 million at March 31, 2015 from $673.3 million at March 31, 2014. The Company recorded a $0.5 million and $4.7 million provision for losses on covered loans during the three months ended March 31, 2015 and 2014, respectively. Refer to “Covered Assets” included elsewhere in this report for further discussion of the provision for loan losses on covered loans.

Impaired Loans

Loans, other than those included in large groups of smaller-balance homogeneous loans, are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement, including scheduled interest payments. The assessment for impairment occurs when and while such loans are on nonaccrual, or when the loan has been restructured. When a loan with unique risk characteristics has been identified as being impaired, the amount of impairment will be measured by the Company using discounted cash flows, except when it is determined that the primary (remaining) source of repayment for the loan is the operation or liquidation of the underlying collateral. In these cases, the current fair value of the collateral, reduced by costs to sell, will be used in place of discounted cash flows. As a final alternative, the observable market price of the debt may be used to assess impairment.

If the measurement of the impaired loan is less than the recorded investment in the loan (including accrued interest, net deferred loan fees or costs and unamortized premium or discount), an impairment allowance is recognized by creating or adjusting the existing allocation of the allowance for loan and lease losses. Interest payments received on impaired loans are generally applied as follows: (1) to principal if the loan is on nonaccrual principal recapture status, (2) to interest income if the loan is on cash basis nonaccrual, and (3) to interest income if the impaired loan has been returned to accrual status.

The following table presents information on impaired loans as of March 31, 2015, December 31, 2014 and March 31, 2014. Loan and lease balances reflect the recorded investment as of the reporting date.

	March 31, 2015				December 31, 2014				March 31, 2014
(in thousands)	Loans and  Leases		Related  Allowance		Loans and  Leases		Related  Allowance		Loans and  Leases		Related  Allowance
Impaired loans, excluding covered loans (1):
Impaired loans with an allowance	$	15,127	$	784	$	15,611	$	728	$	22,788	$	2,857
Impaired loans with no related allowance	36,921		—		45,611		—		77,958		—
Total impaired loans, excluding covered loans	$	52,048			$	61,222			$	100,746
Total impaired loans by loan type:
Commercial	$	7,600	$	471	$	15,364	$	399	$	28,683	$	2,557
Commercial real estate mortgages	22,879		273		25,042		281		41,924		300
Residential mortgages	11,655		40		11,937		48		7,904		—
Real estate construction	8,979		—		6,609		—		18,788		—
Home equity loans and lines of credit	935		—		2,270		—		3,447		—
Total impaired loans, excluding covered loans	$	52,048	$	784	$	61,222	$	728	$	100,746	$	2,857

(1)Impaired loans include $28.9 million, $30.6 million and $39.4 million of loans that are on accrual status at March 31, 2015, December 31, 2014 and March 31, 2014, respectively.

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The recorded investment in impaired loans, excluding covered loans, was $52.0 million at March 31, 2015, $61.2 million at December 31, 2014 and $100.7 million at March 31, 2014. There were no impaired covered loans at March 31, 2015, December 31, 2014 or March 31, 2014.

Troubled Debt Restructured Loans

At March 31, 2015, troubled debt restructured loans were $30.0 million, before specific reserves of $0.8 million. Troubled debt restructured loans were $34.3 million, before specific reserves of $0.7 million, at December 31, 2014 and $55.5 million, before specific reserves of $0.5 million, at March 31, 2014. Troubled debt restructured loans included $18.5 million, $18.9 million and $25.2 million of restructured loans on accrual status at March 31, 2015, December 31, 2014 and March 31, 2014, respectively. At March 31, 2015, there were no outstanding commitments to lend additional funds on restructured loans.

Nonaccrual and Past Due Loans

Total nonperforming assets (nonaccrual loans and OREO), excluding covered assets, were $39.3 million, or 0.19 percent of total loans and OREO, excluding covered assets, at March 31, 2015, compared with $52.9 million, or 0.26 percent, at December 31, 2014, and $80.7 million, or 0.45 percent, at March 31, 2014. Total nonperforming covered assets (nonaccrual covered loans and covered OREO) were $11.6 million at March 31, 2015, $12.8 million at December 31, 2014 and $24.9 million at March 31, 2014.

Company policy requires that a loan be placed on nonaccrual status if either principal or interest payments are 90 days past due, unless the loan is both well secured and in process of collection, or if full collection of interest or principal becomes uncertain regardless of the time period involved. Covered loans accounted for under ASC 310-30 are generally considered accruing and performing loans as the loans accrete interest income over the estimated life of the loan when cash flows are reasonably estimable. Accordingly, acquired impaired covered loans that are contractually past due are still considered to be accruing and performing loans. If the timing and amount of future cash flows is not reasonably estimable, the loans may be classified as nonaccrual loans and interest income is not recognized until the timing and amount of future cash flows can be reasonably estimated. There were no covered loans that were on nonaccrual status as of March 31, 2015, December 31, 2014 and March 31, 2014.

Loans are considered past due following the date when either interest or principal is contractually due and unpaid. A summary of past due loans, excluding loans on nonaccrual status, is provided below:

(in thousands)	March 31, 2015		December 31, 2014		March 31, 2014
Past due loans, excluding covered loans
30-89 days past due	$	15,815	$	11,903	$	12,206
90 days or more past due on accrual status:
Commercial	—		148		—
Residential mortgages	379		921		379
Home equity loans and lines of credit	240		100		—
Installment	409		346		45
Total 90 days or more past due on accrual status	$	1,028	$	1,515	$	424
Past due covered loans
30-89 days past due	$	12,540	$	7,416	$	16,552
90 days or more past due on accrual status	22,107		28,344		38,548

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The following table presents information on nonaccrual loans and OREO as of March 31, 2015, December 31, 2014 and March 31, 2014:

	March 31,			December 31,			March 31,
(in thousands)	2015			2014			2014
Nonperforming assets, excluding covered assets
Nonaccrual loans, excluding covered loans
Commercial	$	8,192		$	15,096		$	19,832
Commercial real estate mortgages	2,901			3,575			16,397
Residential mortgages	12,132			11,943			9,966
Real estate construction	6,598			6,598			18,760
Home equity loans and lines of credit	3,507			4,864			6,040
Installment	39			84			151
Lease financing	7			7			99
Total nonaccrual loans, excluding covered loans	33,376			42,167			71,245
OREO, excluding covered OREO	5,957			10,736			9,412
Total nonperforming assets, excluding covered assets	$	39,333		$	52,903		$	80,657
Nonperforming covered assets
OREO	$	11,552		$	12,760		$	24,855
Ratios (excluding covered assets):
Nonaccrual loans as a percentage of total loans	0.16		%	0.21		%	0.40		%
Nonperforming assets as a percentage of total loans and OREO	0.19			0.26			0.45
Allowance for loan and lease losses to nonaccrual loans	925.39			735.53			429.21
Allowance for loan and lease losses to total nonperforming assets	785.24			586.26			379.12

All nonaccrual loans greater than $1 million are considered impaired and are individually analyzed. The Company does not maintain a reserve for impaired loans where the carrying value of the loan is less than the fair value of the collateral, reduced by costs to sell. Where the carrying value of the impaired loan is greater than the fair value of the collateral, less costs to sell, the Company specifically establishes an allowance for loan and lease losses to cover the deficiency. This analysis ensures that the non-accruing loans have been appropriately reserved.

The table below summarizes the total activity in nonaccrual loans, excluding covered loans, for the three months ended March 31, 2015 and 2014:

Changes in Nonaccrual Loans

	For the three months ended March 31,
(in thousands)	2015			2014
Balance, beginning of the period	$	42,167		$	68,651
Loans placed on nonaccrual	775			12,555
Net charge-offs	(1,640		)	(1,920		)
Loans returned to accrual status	(1,644		)	(1,482		)
Repayments (including interest applied to principal)	(6,282		)	(6,559		)
Balance, end of the period	$	33,376		$	71,245

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In addition to loans disclosed above as past due or nonaccrual, management has also identified $13.5 million of credit facilities to 15 borrowers as of April 27, 2015, where the ability to comply with the present loan payment terms in the future is questionable. However, the inability of the borrowers to comply with repayment terms was not sufficiently probable to place the loan on nonaccrual status at March 31, 2015, and the identification of these loans is not necessarily indicative of whether the loans will be placed on nonaccrual status. This amount was determined based on analysis of information known to management about the borrowers’ financial condition and current economic conditions. In the Form 10-K for the year ended December, 2014, the Company reported that management had identified $4.3 million of credit facilities to 10 borrowers where the ability to comply with the loan payment terms in the future was questionable. Management’s classification of credits as nonaccrual, restructured or problems does not necessarily indicate that the principal is uncollectible in whole or part.

Other Real Estate Owned

The following tables provide a summary of OREO activity for the three months ended March 31, 2015 and 2014:

	For the three months ended March 31, 2015									For the three months ended March 31, 2014
(in thousands)	Non-Covered  OREO			Covered  OREO			Total			Non-Covered  OREO			Covered  OREO			Total
Balance, beginning of period	$	10,736		$	12,760		$	23,496		$	12,611		$	25,481		$	38,092
Additions	—			1,085			1,085			—			2,033			2,033
Sales	(4,779		)	(631		)	(5,410		)	(3,186		)	(2,504		)	(5,690		)
Valuation adjustments	—			(1,662		)	(1,662		)	(13		)	(155		)	(168		)
Balance, end of period	$	5,957		$	11,552		$	17,509		$	9,412		$	24,855		$	34,267

OREO was $17.5 million at March 31, 2015, $23.5 million at December 31, 2014 and $34.3 million at March 31, 2014, respectively. The OREO balance at March 31, 2015 includes covered OREO of $11.6 million, compared with $12.8 million at December 31, 2014 and $24.9 million at March 31, 2014. The balance of OREO at March 31, 2015, December 31, 2014 and March 31, 2014 is net of valuation allowances of $4.1 million, $7.4 million and $14.6 million, respectively.

The Company recognized $0.6 million in total net gain on the sale of OREO in the first quarter of 2015, compared to $1.9 million in the fourth quarter of 2014 and $2.8 million in the year-earlier quarter. Net gain on the sale of OREO in the first quarter of 2015 included $12 thousand of net gain related to the sale of covered OREO, compared to $1.8 million in the fourth quarter of 2014 and $0.4 million in the year-earlier quarter.

Covered OREO expenses and valuation write-downs are recorded in the noninterest expense section of the consolidated statements of income and gains or losses on sale of covered OREO are recognized in the noninterest income section. Under the loss-sharing agreements, 80 percent of eligible covered OREO expenses, valuation write-downs, and losses on sales are reimbursable to the Company from the FDIC and 80 percent of covered gains on sales are payable to the FDIC. The portion of these expenses that is reimbursable or income that is payable is recorded in FDIC loss sharing income (expense), net in the noninterest income section of the consolidated statements of income.

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Other Assets

The following table presents information on other assets:

	March 31,		December 31,			March 31,
(in thousands) (1)	2015		2014			2014
Accrued interest receivable	$	77,911	$	80,721		$	71,105
Deferred compensation fund assets	93,599		92,199			86,571
Stock in government agencies	58,376		58,376			57,202
Private equity and alternative investments	29,188		29,212			31,589
Bank-owned life insurance	88,742		88,069			86,026
Derivative assets	76,695		51,586			35,469
Income tax receivable	44,031		29,463			6,424
FDIC receivable (payable)	2,335		(993		)	1,137
Equipment on operating leases, net	15,309		18,544			30,058
Other	93,003		90,670			102,546
Total other assets	$	579,189	$	537,847		$	508,127

(1) Certain prior period amounts have been adjusted to reflect the adoption of ASU 2014-01. See Note 1, Summary of Significant Accounting Policies, of the Notes to the Unaudited Consolidated Financial Statements for further discussion.

Deposits

Deposits totaled $28.52 billion, $28.11 billion and $25.73 billion at March 31, 2015, December 31, 2014 and March 31, 2014, respectively. Average deposits totaled $27.81 billion for the first quarter of 2015, a decrease of 3 percent from $28.55 billion for the fourth quarter of 2014 and an increase of 10 percent from $25.37 billion for the first quarter of 2014. Core deposits, which include noninterest-bearing deposits and interest-bearing deposits excluding time deposits of $100,000 and over, provide a stable source of low cost funding. Average core deposits were $27.29 billion, $28.06 billion and $24.89 billion for the quarters ended March 31, 2015, December 31, 2014 and March 31, 2014, respectively, and represented 98 percent of total deposits for each respective period. Average noninterest-bearing deposits in the first quarter of 2015 decreased 2 percent from the fourth quarter of 2014 and increased 15 percent from the year-earlier quarter.

Treasury Services deposit balances, which consist primarily of title, escrow, community association and property management deposits, averaged $3.01 billion in the first quarter of 2015, compared with $3.12 billion in the fourth quarter of 2014 and $2.65 billion for the first quarter of 2014. The growth in Treasury Services deposits from the year-earlier quarter largely reflects higher single-family residential mortgage transaction activity.

Borrowed Funds

Total borrowed funds were $638.8 million, $961.5 million and $737.6 million at March 31, 2015, December 31, 2014 and March 31, 2014, respectively. Total average borrowed funds were $894.9 million, $639.5 million and $738.9 million for the quarters ended March 31, 2015, December 31, 2014 and March 31, 2014, respectively.

Short-term borrowings consist of funds with remaining maturities of one year or less and the current portion of long-term debt. Short-term borrowings were $4.4 million as of March 31, 2015 compared to $322.9 million as of December 31, 2014 and $4.1 million as of March 31, 2014. Short-term borrowings at March 31, 2015 consist of the current portions of nonrecourse debt.

Long-term debt consists of borrowings with remaining maturities greater than one year and is primarily comprised of senior notes, subordinated debt, junior subordinated debt and nonrecourse debt. Long-term debt was $634.4 million, $638.6 million and $733.5 million as of March 31, 2015, December 31, 2014 and March 31, 2014, respectively. The decrease from the year-earlier quarter was due to the redemption of $105.0 million in subordinated notes during the third quarter of 2014. The Company’s long-term borrowings have maturity dates ranging from April 2016 to November 2034.

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Off-Balance Sheet

In the normal course of business, the Company is a party to financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit and letters of credit, and to invest in affordable housing funds, private equity and other alternative investments. These instruments involve elements of credit, foreign exchange, and interest-rate risk, to varying degrees, in excess of the amount reflected in the consolidated balance sheets.

Exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and letters of credit is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments, and will evaluate each client’s creditworthiness on a case-by-case basis.

Commitments to extend credit are agreements to lend to a client as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since a portion of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company had off-balance sheet credit commitments totaling $9.95 billion at March 31, 2015, $9.49 billion at December 31, 2014 and $8.27 billion at March 31, 2014.

Standby letters of credit are commitments issued by the Company to guarantee the obligations of its clients to beneficiaries. Commercial letters of credit are issued on behalf of clients to ensure payment in connection with trade transactions. The Company had $707.7 million in letters of credit at March 31, 2015, of which $589.3 million relate to standby letters of credit and $118.4 million relate to commercial letters of credit. The Company had $718.0 million outstanding in letters of credit at December 31, 2014, of which $607.6 million relate to standby letters of credit and $110.4 million relate to commercial letters of credit.

As of March 31, 2015, the Company had private equity fund and alternative investment fund commitments of $71.1 million, of which $59.8 million was funded. As of December 31, 2014 and March 31, 2014, the Company had private equity and alternative investment fund commitments of $67.4 million and $70.9 million, of which $59.4 million and $62.6 million was funded, respectively.

Capital

In July 2013, the FDIC, the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System adopted a final rule that revises its risk-based and leverage capital requirements (referred to as the Basel III rule). The Basel III final rule implements a revised definition of regulatory capital, a new common equity Tier 1 minimum capital requirement, and a higher minimum Tier 1 capital requirement. For banking organizations not subject to the advanced approaches rule, compliance with the standardized approach for determining risk-weighted assets and compliance with the transition period for the revised minimum regulatory capital ratios began on January 1, 2015. The transition period for the capital conservation buffer will begin on January 1, 2016 and the fully implemented regulatory capital ratios will be effective on January 1, 2019. Important elements of the Basel III rule include the following:

·Increased minimum capital requirements;

·Higher quality of capital so banks are better able to absorb losses;

·A leverage ratio concept for international banks and U.S. bank holding companies;

·Specific capital conservation buffers; and

·A more uniform supervisory standard for U.S. financial institution regulatory agencies.

The Basel III rule became effective for the Company on January 1, 2015. Using the new standards at March 31, 2015, the Company reported a common equity tier 1 capital ratio of 8.71 percent, a tier 1 capital ratio of 9.82 percent, a total capital ratio of 11.87 percent and a tier 1 leverage ratio of 7.53 percent.

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The following table presents the regulatory standards for well-capitalized institutions and the capital ratios for the Corporation and the Bank at March 31, 2015, December 31, 2014 and March 31, 2014:

	Regulatory Well-Capitalized Standards		March 31, 2015		December 31, 2014		March 31, 2014
City National Corporation (1)
Common equity tier 1 capital (1)	6.50	%	8.71	%	N/A	%	N/A	%
Tier 1 risk-based capital	8.00		9.82		9.78		10.18
Total risk-based capital	10.00		11.87		11.95		13.08
Tier 1 leverage	—		7.53		7.22		7.41
Tangible common equity to tangible assets (2)	—		6.50		6.28		6.31
City National Bank (1)
Common equity tier 1 capital (1)	6.50	%	9.58	%	N/A	%	N/A	%
Tier 1 risk-based capital	8.00		9.58		9.60		10.25
Total risk-based capital	10.00		11.69		11.74		13.10
Tier 1 leverage	5.00		7.35		7.08		7.45

(1)Risk-based capital ratios for the current period were calculated under Basel III rules, which became effective for the Company on January 1, 2015. Prior period data was based on Basel I rules. Common equity tier 1 capital under Basel III replaces Tier 1 common equity under Basel I.

(2)Tangible common equity to tangible assets is a non-GAAP financial measure that represents total common equity less identifiable intangible assets and goodwill divided by total assets less identifiable assets and goodwill. Management reviews tangible common equity to tangible assets in evaluating the Company’s capital levels and has included this ratio in response to market participant and regulatory’ interest in tangible common equity as a measure of capital. See reconciliation of the GAAP financial measure to this non-GAAP financial measure below.

Reconciliation of GAAP financial measure to non-GAAP financial measure:

(in thousands) (1)	March 31, 2015			December 31, 2014			March 31, 2014
Common equity	$	2,750,754		$	2,675,085		$	2,515,722
Less: Goodwill and other intangible assets	(669,322		)	(670,699		)	(681,756		)
Tangible common equity (A)	$	2,081,432		$	2,004,386		$	1,833,966
Total assets	$	32,698,899		$	32,597,232		$	29,725,630
Less: Goodwill and other intangible assets	(669,322		)	(670,699		)	(681,756		)
Tangible assets (B)	$	32,029,577		$	31,926,533		$	29,043,874
Tangible common equity to tangible assets (A)/(B)	6.50		%	6.28		%	6.31		%

(1)   Certain prior period amounts have been adjusted to reflect the adoption of ASU 2014-01. See Note 1, Summary of Significant Accounting Policies, of the Notes to the Unaudited Consolidated Financial Statements for further discussion.

The ratio of period-end equity to period-end assets was 9.23 percent, 9.03 percent and 9.36 percent as of March 31, 2015, December 31, 2014 and March 31, 2014, respectively. Period-end common shareholders’ equity to period-end assets was 8.41 percent, 8.21 percent and 8.46 percent for the same periods, respectively.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ASSET/LIABILITY MANAGEMENT

Market risk results from the variability of future cash flows and earnings due to changes in the financial markets. These changes may also impact the fair values of loans, securities and borrowings. The values of financial instruments may fluctuate because of interest rate changes, foreign currency exchange rate changes or other market changes. The Company’s asset/liability management process entails the evaluation, measurement and management of market risk and liquidity risk. The principal objective of asset/liability management is to optimize net interest income subject to margin volatility and liquidity constraints over the long term. Margin volatility results when the rate reset (or repricing) characteristics of assets are materially different from those of the Company’s liabilities. The Board of Directors approves asset/liability policies and annually reviews and approves the limits within which the risks must be managed. The Asset/Liability Management Committee (“ALCO”), which is comprised of senior management and key risk management individuals, sets risk management guidelines within the broader limits approved by the Board, monitors the risks and periodically reports results to the Board.

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A quantitative and qualitative discussion about market risk is included on pages 72 to 77 of the Corporation’s Form 10-K for the year ended December 31, 2014.

Liquidity Risk

Liquidity risk results from the mismatching of asset and liability cash flows. Funds for this purpose can be obtained in cash markets, by borrowing, or by selling certain assets. The objective of liquidity management is to manage cash flow and liquidity reserves so that they are adequate to fund the Company’s operations and meet obligations and other commitments on a timely basis and at a reasonable cost. The Company achieves this objective through the selection of asset and liability maturity mixes that it believes best meet its needs. The Company’s liquidity position is enhanced by its ability to raise additional funds as needed in the wholesale markets. Liquidity risk management is an important element in the Company’s ALCO process, and is managed within limits approved by the Board of Directors and guidelines set by management. Attention is also paid to potential outflows resulting from disruptions in the financial markets or to unexpected credit events. These factors are incorporated into the Company’s contingency funding analysis, and provide the basis for the identification of primary and secondary liquidity reserves.

In recent years, the Company’s core deposit base has provided the majority of the Company’s funding requirements. This relatively stable and low-cost source of funds, along with shareholders’ equity, provided 94 percent of funding for average total assets for the first quarter of 2015 and for the year-earlier quarter. Strong core deposits are indicative of the strength of the Company’s franchise in its chosen markets and reflect the confidence that clients have in the Company. The Company places a very high priority in maintaining this confidence through conservative credit and capital management practices and by maintaining significant on-balance sheet liquidity reserves.

Funding obtained through short-term wholesale or market sources averaged $255.0 million for the three months ended March 31, 2015. No funding was obtained through short-term wholesale or market sources for the year-earlier period. The Company’s liquidity position was also supported through longer-term borrowings (including the current portion of long-term debt) which averaged $640.0 million for the three months ended March 31, 2015, compared with $738.9 million for the year-earlier quarter. Market sources of funds comprise a modest portion of total Bank funding and are managed within concentration and maturity guidelines reviewed by management and implemented by the Company’s treasury department.

Liquidity is further provided by assets such as federal funds sold, reverse repurchase agreements, balances held at the Federal Reserve Bank, and trading securities, which may be immediately converted to cash at minimal cost. The aggregate of these assets averaged $474.9 million for the first quarter of 2015, compared with $903.1 million in the year-earlier quarter. In addition, the Company has committed and unutilized secured borrowing capacity of $6.27 billion as of March 31, 2015 from the Federal Home Loan Bank of San Francisco, of which the Bank is a member. The Company’s investment portfolio also provides a substantial liquidity reserve. The portfolio of securities available-for-sale averaged $5.57 billion and $5.52 billion for the quarters ended March 31, 2015 and 2014, respectively. The unpledged portion of securities available-for-sale and held-to-maturity at fair value totaled $6.81 billion at March 31, 2015. These securities could be used as collateral for borrowing or a portion of the securities available-for-sale could be sold.

Interest-Rate Risk

Net Interest Income Simulation: As part of its overall interest-rate risk management process, the Company performs stress tests on net interest income projections based on a variety of factors, including interest rate levels, changes in the relationship between the prime rate and short-term interest rates, and the shape of the yield curve. The Company uses a simulation model to estimate the severity of this risk and to develop mitigation strategies, including interest-rate hedges. The magnitude of the change is determined from historical volatility analysis. The assumptions used in the model are updated periodically and reviewed and approved by ALCO. In addition, the Board of Directors has adopted limits within which interest rate exposure must be contained. Within these broader limits, ALCO sets management guidelines to further contain interest-rate risk exposure.

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The Company is naturally asset-sensitive due to its large portfolio of rate-sensitive commercial loans that are funded in part by noninterest-bearing and rate-stable core deposits. As a result, if there are no significant changes in the mix of assets and liabilities, the net interest margin increases when interest rates increase and decreases when interest rates decrease. The Company uses on and off-balance sheet hedging vehicles to manage risk. The Company uses a simulation model to estimate the impact of changes in interest rates on net interest income. Interest rate scenarios include stable rates and a 200 basis point and a 400 basis point parallel shift in the yield curve occurring gradually over a two-year period. The model is used to project net interest income assuming no changes in loans or deposit mix as it stood at March 31, 2015, as well as a dynamic simulation that includes changes to balance sheet mix in response to changes in interest rates. Loan yields and deposit rates change over the simulation horizon based on current spreads and adjustment factors that are statistically derived using historical rate and balance sheet data.

As of March 31, 2015, the Federal funds target rate was at a range of zero percent to 0.25 percent. Further declines in interest rates are not expected to significantly reduce earning asset yields or liability costs, nor have a meaningful effect on net interest margin. The Company’s net interest income simulation for 2015 was performed under two rate scenarios: a 200 basis point gradual increase in rates and a 400 basis point gradual increase in rates, both over a 2-year horizon. Under the 200 basis point scenario, loans, excluding covered loans which are in a runoff mode, increase by 13 percent per year compared to the base case and deposits decline 4 percent per year. At March 31, 2015, a gradual 200 basis point parallel increase in the yield curve over the next 24 months assuming a static balance sheet would result in an increase in projected net interest income of approximately 6.5 percent in year one and 23 percent in year two over the base case. The dynamic simulation incorporates balance sheet changes resulting from a gradual 200 basis point increase in rates. In combination, these rate and balance sheet effects result in an increase in projected net interest income of approximately 7.8 percent in year one and 31.7 percent in year two over the base case. Under the 400 basis point scenario, loans, excluding covered loans which are in a runoff mode, increase by 13 percent per year compared to the base case and deposits decline 7.5 percent per year. At March 31, 2015, a gradual 400 basis point parallel increase in the yield curve over the next 24 months assuming a static balance sheet would result in an increase in projected net interest income of approximately 13.3 percent in year one and 45.9 percent in year two over the base case. This compares to an increase in projected net interest income of 10.5 percent in year one and 37.3 percent in year two over the base case at March 31, 2014. The dynamic simulation based on a gradual 400 basis point increase in rates results in an increase in projected net interest income of approximately 14.2 percent in year one and 49.8 percent in year two over the base case. Interest rate sensitivity has increased due to changes in the mix of the balance sheet, primarily growth in floating rate loans and non-rate sensitive deposits. The Company’s asset sensitivity is primarily tied to changes in short-term rates due to its large portfolio of rate-sensitive loans and funding provided by noninterest-bearing and rate-stable core deposits. The Company’s interest-rate risk exposure remains within Board limits and ALCO guidelines.

The Company’s loan portfolio includes floating rate loans which are tied to short-term market index rates, adjustable rate loans for which the initial rate is fixed for a period from one year to as much as ten years, and fixed-rate loans whose interest rate does not change through the life of the transaction. The following table shows the composition of the Company’s loan portfolio, including covered loans, by major loan category as of March 31, 2015. Each loan category is further divided into Floating, Adjustable and Fixed rate components. Floating rate loans are generally tied to either the Prime rate or to a LIBOR-based index.

	Floating Rate															Total
(in millions)	Prime			LIBOR			Total			Adjustable			Fixed			Loans
Commercial and lease financing	$	2,656		$	5,922		$	8,578		$	73		$	1,451		$	10,102
Commercial real estate mortgages	288			2,164			2,452			78			1,207			3,737
Residential mortgages	7			—			7			3,815			1,478			5,300
Real estate construction	112			656			768			—			26			794
Home equity loans and lines of credit	772			—			772			4			16			792
Installment	98			—			98			—			88			186
Covered loans	15			62			77			329			74			480
Total loans and leases	$	3,948		$	8,804		$	12,752		$	4,299		$	4,340		$	21,391
Percentage of portfolio	19		%	41		%	60		%	20		%	20		%	100		%

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Certain floating rate loans have a “floor” rate which is absolute and below which the loan rate will not fall even though market rates may be unusually low. At March 31, 2015, $12.75 billion (60 percent) of the Company’s loan portfolio was floating rate, of which $10.95 billion (86 percent) was not impacted by rate floors. This is because either the loan contract does not specify a minimum or floor rate, or because the contractual loan rate is above the minimum rate specified in the loan contract. Of the loans which were at their contractual minimum rate, $1.53 billion (12 percent) were within 0.75 percent of the contractual loan rate absent the effects of the floor. Thus, the rate on these loans will be relatively responsive to increases in the underlying Prime or LIBOR index, and all will adjust upwards should the underlying index increase by more than 0.75 percent. Only $29.6 million of floating rate loans have floors that are more than 2 percent above the contractual rate formula. Thus, the yield on the Company’s floating rate loan portfolio is expected to be highly responsive to changes in market rates. The following table shows the balance of loans in the Floating Rate portfolio stratified by spread between the current loan rate and the floor rate as of March 31, 2015:

	Loans with No  Floor and  Current Rate  Greater than			Interest Rate Increase Needed for Loans  Currently at Floor Rate to Become Floating
(in millions)	Floor			< 0.75%			0.76% - 2.00%			> 2.00%			Total
Prime	$	2,910		$	854		$	182		$	2		$	3,948
LIBOR	8,038			678			60			28			8,804
Total floating rate loans	$	10,948		$	1,532		$	242		$	30		$	12,752
% of total floating rate loans	86		%	12		%	2		%	—		%	100		%

Economic Value of Equity: The economic value of equity (“EVE”) model is used to evaluate the vulnerability of the market value of shareholders’ equity to changes in interest rates. The EVE model calculates the expected cash flow of all of the Company’s assets and liabilities under sharply higher and lower interest rate scenarios. The present value of these cash flows is calculated by discounting them using the interest rates for that scenario. The difference between the present value of assets and the present value of liabilities in each scenario is the EVE. The assumptions about the timing of cash flows, level of interest rates and shape of the yield curve are the same as those used in the net interest income simulation. They are updated periodically and are reviewed by ALCO at least annually.

As of March 31, 2015, an instantaneous 200 basis point increase in interest rates results in a 0.8 percent decline in EVE. This compares to a 6.2 percent decline in EVE a year-earlier. The decrease in sensitivity is primarily due to changes in the mix of the balance sheet and decline in long-term interest rates. Measurement of a 200 basis point decrease in rates as of March 31, 2015 and 2014 is not meaningful due to the current low rate environment.

Interest-Rate Risk Management

Interest-rate swaps may be used to reduce cash flow variability and to moderate changes in the fair value of long-term financial instruments. Net interest income or expense associated with interest-rate swaps (the difference between the fixed and floating rates paid or received) is included in net interest income in the reporting periods in which they are earned. Derivatives are recorded on the consolidated balance sheets at their fair value. The treatment of changes in the fair value of derivatives depends on the character of the transaction. The Company had no interest-rate swaps designated as hedging instruments at March 31, 2015, December 31, 2014 and March 31, 2014.

The Company has not entered into any hedge transactions involving any other interest-rate derivative instruments, such as interest-rate floors, caps, and interest-rate futures contracts for its own portfolio in 2015. Under existing policy, the Company could use such financial instruments in the future if deemed appropriate.

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Other Derivatives

The Company also offers various derivative products to clients and enters into derivative transactions in due course. These derivative contracts are offset by paired trades with unrelated bank counterparties. These transactions are not linked to specific Company assets or liabilities in the consolidated balance sheets or to forecasted transactions in a hedge relationship and, therefore, do not qualify for hedge accounting. The contracts are marked-to-market each reporting period with changes in fair value recorded as part of Other noninterest income in the consolidated statements of income. Fair values are determined from verifiable third-party sources that have considerable experience with the derivative markets. The Company provides client data to the third-party source for purposes of calculating the credit valuation component of the fair value measurement of client derivative contracts. At March 31, 2015 and 2014, the Company had entered into derivative contracts with clients (and offsetting derivative contracts with counterparties) having a notional balance of $3.66 billion and $3.10 billion, respectively.

Counterparty Risk and Collateral

Interest-rate swap agreements involve the exchange of fixed and variable-rate interest payments based upon a notional principal amount and maturity date. The Company’s interest-rate swaps had no credit risk exposure at March 31, 2015, compared with $2.2 million of credit risk exposure at March 31, 2014. The credit exposure represents the cost to replace, on a present value basis and at current market rates, all contracts outstanding by trading counterparty having an aggregate positive market value, net of margin collateral received. The Company’s swap agreements require the deposit of cash or marketable debt securities as collateral for this risk if it exceeds certain market value thresholds. These requirements apply individually to the Corporation and to the Bank. No collateral had been received from swap counterparties at March 31, 2015 and March 31, 2014. The Company delivered cash and securities collateral valued at $62.5 million on swap agreements at March 31, 2015 and $27.5 million at March 31, 2014.

Market Risk—Foreign Currency Exchange

The Company enters into foreign-exchange contracts with its clients and counterparty banks primarily for the purpose of offsetting or hedging clients’ transaction and economic exposures arising out of commercial transactions. The Company actively manages its foreign exchange exposures within prescribed risk limits and controls. At March 31, 2015, the Company’s outstanding foreign exchange contracts for client accounts totaled $872.2 million. The mark-to-market on foreign exchange contracts included in other assets and other liabilities totaled $15.4 million and $16.0 million, respectively, at March 31, 2015. At March 31, 2015, the Company had delivered and received cash collateral on foreign exchange contracts totaling $2.1 million and $1.9 million, respectively.

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ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of its “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective.

INTERNAL CONTROL OVER FINANCIAL REPORTING

There was no change in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1A. RISK FACTORS

For a discussion of risk factors relating to the Company’s business, refer to Item 1A of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (“Form 10-K”). There has been no material change in the risk factors as previously disclosed in the Company’s Form 10-K.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c) Purchase of Equity Securities by the Issuer and Affiliated Purchaser.

The information required by subsection (c) of this item regarding purchases by the Company during the quarter ended March 31, 2015 of equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act is incorporated by reference from the relevant portion of Part I, Item 1 of this report under Note 8.

ITEM 6.    EXHIBITS

Exhibit No.
10.1*	Performance Unit Award Agreement Under the City National Corporation 2008 Omnibus Plan (TSR), dated as of March 11, 2015 by and between Registrant and Russell D. Goldsmith (Filed herewith).
10.2*	Performance Unit Award Agreement Addendum (TSR) (Filed herewith).
10.3*	Performance Unit Award Agreement Under the City National Corporation 2008 Omnibus Plan (Performance Metrics Based), dated as of March 11, 2015 by and between Registrant and Russell D. Goldsmith (Filed herewith).
10.4*	Performance Unit Award Agreement Addendum (Performance Metrics Based) (Filed herewith).
10.5*	Annual Stock Unit Award Agreement Under the City National Corporation 2008 Omnibus Plan, dated as of March 11, 2015 by and between Registrant and Russell D. Goldsmith (Filed herewith).
10.6*	Annual Stock Unit Award Agreement Addendum (Filed herewith).
10.7*	Eleventh Amendment to Employment Agreement, dated as of February 27, 2015, among Bram Goldsmith, Registrant and City National Bank (Filed herewith).
10.8*	Form of Restricted Stock Award Agreement Under the City National Corporation 2008 Omnibus Plan (Filed herewith).
10.9*	Form of Stock Option Award Agreement Under the City National Corporation 2008 Omnibus Plan (Filed herewith).
12	Statement Re: Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Requirements.
31.1	Chief Executive Officer certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Chief Financial Officer certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document

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101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

*         Management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CITY NATIONAL CORPORATION
	(Registrant)
DATE: May 8, 2015	/s/ Christopher J. Carey
	CHRISTOPHER J. CAREY
	Executive Vice President and
	Chief Financial Officer
	(Authorized Officer and
	Principal Financial Officer)

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EX-10.1

Exhibit 10.1

PERFORMANCE UNIT AWARD AGREEMENT

UNDER THE

CITY NATIONAL CORPORATION

2008 OMNIBUS PLAN

(TSR)

THIS PERFORMANCE UNIT AWARD AGREEMENT is made by and between CITY NATIONAL CORPORATION, a Delaware corporation (the “Company”), and Russell D. Goldsmith, an employee of the Company or a subsidiary of the Company (“Colleague”), with reference to the following:

A.On April 23, 2008 the shareholders of the Company adopted the City National Corporation 2008 Omnibus Plan, as amended from time to time thereafter (the “Plan”), pursuant to which the Compensation, Nominating & Governance Committee of the Board of Directors (the “Committee”) may award selected officers and other Company or Company subsidiary employees Performance Awards, including Performance Units payable solely in cash, or other deferred Awards of the Company’s common stock.

B.The Committee has determined to grant to Colleague an award of Performance Units payable solely in cash pursuant to the terms and conditions of this Agreement (“Performance Unit Award” or “Award”).

1.Grant of Performance Unit Award.

(a)Details of Performance Unit Award.  Pursuant to the Plan, the Company hereby grants a Performance Unit Award with the following terms:

(i)Except as otherwise provided in Section 1(a)(iv) of this Agreement, the Performance Unit Award shall be earned based on the percentile ranking of the Company’s TSR (as defined in the Addendum) on the last day of the Performance Period (as defined below) relative to the TSRs measured as of such date for the companies comprising the Peer Banks (as defined in the Addendum) on a straight line basis for performance achieved between the TSR Percentiles in accordance with the following table (“Earned Payout”):

TSR Percentile	Value
Below 25th	$	0
25th	500,000
50th	1,000,000
75th	1,500,000
90th and above	1,750,000

(ii)The Performance Period means the period commencing on July 1, 2015 and ending on June 30, 2018.

(iii)If (A) Colleague’s employment is terminated during the Performance Period in circumstances that result in a lapse of the service-based forfeiture restrictions applicable to the Award pursuant to Section C of the Addendum and (B) no Change in Control Event has occurred during the Performance Period and prior to the Colleague’s termination of employment, then except as otherwise provided in Section 1(a)(iv) of this Agreement, the Award will remain outstanding and the Earned Payout will be determined in accordance with Section 1(a)(i) of this Agreement.

(iv)If a Change in Control Event occurs prior to completion of the Performance Period, whether prior to or after Colleague’s termination of employment under circumstances in which the Award remains outstanding (as provided in Section 1(a)(iii) of this Agreement), the Earned Payout shall be deemed to be the greater of $1,000,000 or the amount calculated pursuant to Section 1(a)(i) of this Agreement as if the Performance Period ended on the last business day immediately preceding the date of the Change in Control Event.

(iv)The consideration, if any, for the Performance Units:  Colleague’s Employment with the Company.

(b)Performance Unit Account.  The Performance Units will be credited to Colleague’s Performance Unit Account as of the first day of the Performance Period and upon satisfaction of the conditions of this Agreement.

2.Performance Units.  Colleague hereby accepts the Performance Units and agrees with respect thereto as follows:

(a)Forfeiture. In the event of termination of Colleague’s employment with the Company or an employing subsidiary for any reason other than as provided in Section C of the Addendum prior to the last day of the Performance Period, Colleague shall, for no consideration, immediately forfeit to the Company the Performance Units.

(b)Lapse of Forfeiture Restrictions.  With respect to the Award, the forfeiture restrictions lapse as to one hundred percent of the underlying Performance Units on the last day of the Performance Period; provided that Colleague has been continuously employed by the Company from the beginning of the Performance Period through the last day of the Performance Period.

Notwithstanding the foregoing, the forfeiture restrictions shall lapse as to the Performance Units earlier upon the termination and vesting events provided in Section C of the Addendum. In the event Colleague’s employment is terminated for any reason other than as provided in Section C of the Addendum, the Committee or its delegate, as appropriate, may, in the Committee’s or such delegate’s sole discretion, approve the lapse of forfeiture restrictions as to any or all Performance Units still subject to such conditions, such lapse to be effective on the date of such approval or Colleague’s termination date, if later.

2

(c)Performance Unit Account.  Colleague’s Performance Unit Account shall be a memorandum account on the books of the Company. The Performance Units credited to a Performance Unit Account shall be used solely as the basis for the determination of the amount of cash to be eventually distributed to Colleague in accordance with the Addendum to this Agreement. The Performance Units shall not be treated as property or as a trust fund of any kind. The Performance Units credited (and the amount of cash to which Colleague is entitled under the Plan) shall be subject to adjustment in accordance with the terms of the Plan.

(d)Nontransferability.  The Performance Units and the rights and interests of Colleague under this Agreement may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of prior to distribution.

3.Withholding of Tax.  The Company is authorized to withhold from any cash remuneration otherwise payable to Colleague pursuant to the Performance Unit Award any taxes required to be withheld by applicable law.

4.Limitation on Transfer.  Other than upon death or pursuant to a DRO, the Performance Units and all rights granted under this Agreement are personal to Colleague and cannot be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to execution, attachment or similar processes.

5.Plan and Addendum Incorporated/Availability.  Colleague acknowledges that the Company has made available a copy of the Plan and the Addendum to this Agreement, and agrees that this Performance Unit Award shall be subject to all of the terms and conditions set forth in the Plan and the Addendum, including future amendments thereto, if any, pursuant to the terms thereof, which Plan and Addendum are incorporated herein by reference as a part of this Agreement. In the event of any conflict between the Plan, the Addendum and this Agreement, the provisions of the Plan will prevail.  Colleague’s rights hereunder are subject to modification or termination in certain events, as provided in the Plan, including without limitation such rules and regulations as may from time to time be adopted or promulgated in accordance with paragraph 1.3 of the Plan.  Capitalized terms not defined in this Agreement shall have the meanings set forth in the Plan and the Addendum.

6.Employment Relationship.  For purposes of this Agreement, Colleague shall be considered to be in the employment of the Company as long as Colleague remains an employee of either the Company, any successor corporation or a parent or subsidiary corporation (as defined in section 424 of the Internal Revenue Code) of the Company or any successor corporation.  Any question as to whether and when there has been a termination of such employment, and the cause of such termination, shall be determined by the Committee, or its delegate, as appropriate, and its determination shall be final.

7.Committee’s Powers.  No provision contained in this Agreement shall in any way terminate, modify or alter, or be construed or interpreted as terminating, modifying or altering any of the powers, rights or authority vested in the Committee or, to the extent

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delegated, in its delegate pursuant to the terms of the Plan or resolutions adopted in furtherance of the Plan, including, without limitation, the right to make certain determinations and elections with respect to the Performance Units.  All decisions of the Committee (as established pursuant to the Plan) with respect to any questions concerning the application, administration or interpretation of the Plan will be conclusive and binding on the Company and Colleague.

8.Binding Effect.  This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under Colleague.

9.Dispute Resolution.  If a dispute arises between Colleague and Company in connection with the Performance Unit Award, the dispute will be resolved by binding arbitration with the American Arbitration Association (AAA) in accordance with the AAA’s Commercial Arbitration Rules then in effect.

10.Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of California.

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer thereunto duly authorized, and Colleague has executed this Agreement, all as of March 11, 2015.

CITY NATIONAL CORPORATION
By:	/s/ Christopher J. Carey
Christopher J. Carey, Executive Vice
President, Chief Financial Officer
/s/  Russell Goldsmith
Russell Goldsmith

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EX-10.2

Exhibit 10.2

PERFORMANCE UNIT AWARD AGREEMENT

ADDENDUM

(TSR)

THIS ADDENDUM TO THE PERFORMANCE UNIT AWARD AGREEMENT provides the rules and procedures relating to the grant of the Performance Unit Award and the operation of the Performance Unit Account.

A.Definitions.  Any capitalized terms used, but not defined, in this Addendum shall have the meaning set forth in the Performance Unit Award Agreement (TSR).  Whenever the following terms are used in the Performance Unit Award Agreement or in this Addendum, they shall have the meaning specified below, unless the context clearly indicates to the contrary:

1.2008 Agreement means the Employment Agreement, dated as of December 22, 2008, by and between Colleague and City National Corporation, as amended.

2.2010 Agreement means the Amended and Restated Employment Agreement made as of the 24th day of June, 2010, by and between Colleague, City National Bank and City National Corporation, as amended on March 14, 2012 and July 14, 2014.

3.Change in Control Event shall have the meaning assigned to it in the Plan.

4.Disability means Colleague shall become incapable of fulfilling his obligations because of injury or physical or mental illness which shall exist or may reasonably be anticipated to exist for a period of twelve (12) consecutive months or for an aggregate of twelve (12) months during any twenty-four (24) month period.

5.Peer Banks means the component companies ranked as the 11th through 50th of the largest banks in the SNL Bank Index (but excluding Company) as measured by assets based on the most recently available public data as of the first day of the Performance Period or if the SNL Bank Index is no longer maintained or is no longer appropriate, in the reasonable judgment of the Committee, the Peer Banks listed in any other reasonably comparable index prepared by a third party or the Committee of publicly-traded financial companies such that Company falls between the 25th and 75th percentile in terms of size of market capitalization and/or assets.

6.Performance Unit Account means the memorandum account maintained by the Company on behalf of Colleague which is credited with Performance Units.  Each Performance Unit represents the right to receive a distribution of cash in an amount as provided in the Performance Unit Award Agreement and this Addendum.

7.Total Shareholder Return shall be determined with respect to the Company and the companies included in the Peer Banks at the end of the Performance Period (each an “index company”) and shall be determined as follows:

(Price End – Price Begin) + Dividends

Price Begin

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with “Price Begin” equal to the average of each company’s closing price per share of common stock on the principal exchange or trading market over the 20 trading days ending on the first trading day in the Performance Period (adjusted to give effect to stock splits and stock dividends during the measurement period), “Price End” equal to the average of the company’s closing price per share of common stock on its principal exchange or trading market over the 20 trading days ending on the final trading day of the Performance Period (adjusted to give effect to stock splits and stock dividends during the measurement period) and “Dividends” equal to the aggregate cash dividend per share of common stock paid during the Performance Period.

B.Performance Unit Account.  As soon as practicable following the first day of the Performance Period, the Company shall credit Colleague’s Performance Unit Account with the Performance Units.

C.Lapse of Forfeiture Restrictions.  The Performance Unit Award is subject to forfeiture based on continued service until the forfeiture restrictions lapse in accordance with Section 2(b) of the Performance Unit Award Agreement.

Notwithstanding the forfeiture provision in Section 2(b) of the Performance Unit Award Agreement, the service-based forfeiture restrictions on the Performance Units shall immediately lapse:

·upon Colleague’s termination of employment by the Company without good cause or by Colleague for good reason (as those terms are defined in the 2010 Agreement) prior to a Change in Control Event;

·upon Colleague’s voluntary termination of employment for any reason or by the Company without good cause (as such term is defined in the 2010 Agreement) on or after expiration of the 2010 Agreement as provided in Section 10(f) of the 2010 Agreement prior to a Change in Control Event;

·upon Colleague’s termination of employment by the Company without cause or by Colleague for good reason (as those terms are defined in the 2008 Agreement) following a Change in Control Event; or

·upon Colleague’s termination of employment due to death or Disability.

D.Payment Date.

1.Except as set forth in paragraph 2 of this Section D, the Earned Payout as determined in Section 1(a)(i) of the Performance Unit Award Agreement, if any, shall be distributed to Colleague (or, in the event of his death, Colleague’s Beneficiary) in cash in a lump sum payment as soon as reasonably practicable following the end of the Performance Period, but no later than sixty (60) days thereafter.

2.Subject to Section E, upon Colleague’s separation from service (within the meaning of Section 409A of the Code and the Treasury Regulations thereunder) following a Change in Control Event that results in the lapse of forfeiture restrictions as set forth in Section C of this Addendum, the payment shall be paid as soon as reasonably practicable following the date the lapse of forfeiture

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restrictions occurs, but in no event later than thirty (30) days thereafter; provided that if the Performance Units constitute nonqualified deferred compensation within the meaning of Section 409A of the Code, then this sentence shall only apply to the Performance Units if (a) such separation from service occurs within twenty four months following a Change in Control Event and (b) such Change in Control Event constitutes a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5).  Except to the extent provided by the preceding sentence, the Earned Payout shall be paid according to the schedule set forth in paragraph 1 of this Section D.

E.Plan Construction.  It is the intent of the Company that the Performance Units shall comply with Section 409A of the Code, and the Performance Unit Award Agreement and this Addendum shall be interpreted in a manner which is consistent with the foregoing intent.  Any provisions of the Performance Unit Award Agreement and this Addendum which would not comply with the requirements of Section 409A of the Code and the Treasury Regulations adopted thereunder shall be deemed to be modified or eliminated in order to comply with these requirements.  Sections 10(h) and 24 of the 2010 Employment Agreement addressing the application of Section 409A of the Code are hereby incorporated by reference.  Notwithstanding anything in the Plan, the Performance Unit Award Agreement or the Addendum to the contrary, in the event of a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5), the Company may terminate the Performance Unit Awards granted hereunder in a manner consistent with Section 1.409A-3(j)(ix)(B) of the Treasury Regulations under Section 409A of the Code.

F.Unfunded Plan.  The liability of the Company to the Colleague under this Performance Unit Award Agreement shall be that of a debtor only pursuant to such contractual obligations as are created by the Plan, the Performance Unit Award Agreement and this Addendum, and no such obligation of the Company shall be deemed to be secured by any assets, pledges, or other encumbrances on any property of the Company.  The Company has not segregated or earmarked any of the Company’s assets for the benefit of Colleague or his beneficiary or estate, and the Plan does not, and shall not be construed to, require the Company to do so.  Colleague and his beneficiary or estate shall have only an unsecured, contractual right against the Company with respect to any Performance Unit and such right shall not be deemed superior to the right of any other creditor.

G.Clawback.  Section 7(e) of the 2010 Agreement addressing clawback is hereby incorporated by reference.

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EX-10.3

Exhibit 10.3

PERFORMANCE UNIT AWARD AGREEMENT

UNDER THE

CITY NATIONAL CORPORATION

2008 OMNIBUS PLAN

(PERFORMANCE METRICS BASED)

THIS PERFORMANCE UNIT AWARD AGREEMENT is made by and between CITY NATIONAL CORPORATION, a Delaware corporation (the “Company”), and Russell D. Goldsmith, an employee of the Company or a subsidiary of the Company (“Colleague”), with reference to the following:

A.On April 23, 2008 the shareholders of the Company adopted the City National Corporation 2008 Omnibus Plan, as amended from time to time thereafter (the “Plan”), pursuant to which the Compensation, Nominating & Governance Committee of the Board of Directors (the “Committee”) may award selected officers and other Company or Company subsidiary employees Performance Awards, including Performance Units payable solely in cash, or other deferred Awards of the Company’s common stock.

B.The Committee has determined to grant to Colleague an award of Performance Units payable solely in cash pursuant to the terms and conditions of this Agreement (“Performance Unit Award” or “Award”).

1.Grant of Performance Unit Award.

(a)Details of Performance Unit Award.  Pursuant to the Plan, the Company hereby grants a Performance Unit Award with the following terms:

(i)On the Award Date, Colleague shall be granted an Award with a target payout of $1,325,000 (the “Target Award Amount”).  The Award will be divided into four segments (each, an “Award Segment”) and each Award Segment will have a target payout of 25% of the Target Award Amount ($331,250).  Each Award Segment shall be assigned one of four Award Metrics (as defined in the Addendum).

(ii)Except as otherwise provided in Section 1(a)(vi) of this Agreement, each Award Segment shall have an earned value equal to Maximum (the amount of earned value for each Award Segment, the “Award Segment Earned Payout”) as set forth in the table below if the Company’s net income goal established by the Committee for the 2015 fiscal year (the “Section 162(m) Goal”) is achieved at 75% of target; provided, that the Award Segment Earned Payout, if any, for each Award Segment will be adjusted downward based on the percentile ranking of the Company with respect to the Award Metric for such Award Segment on the last day of the Performance Period relative to the performance of the companies comprising the Peer Banks with respect to the applicable Award Metric in accordance with the table below.  The amount of the Award Segment Earned Payout for performance between Threshold and Target and between Target and Maximum will be determined on a straight line basis.

Award Level	Percentile Achieved	Earned Payout per Award Segment
Maximum	75th or above	$	579,687.50
Target	50th	$	331,250
Threshold	35th	$	165,625

(iii)The Performance Period means the period commencing on January 1, 2015 and ending December 31, 2017.

(iv)The total earned payout in respect of the Award (“Earned Payout”) will be the sum of the Award Segment Earned Payout for each Award Segment.

(v)If (A) Colleague’s employment is terminated during the Performance Period in circumstances that result in a lapse of the service-based forfeiture restrictions applicable to the Award pursuant to Section C of the Addendum and (B) no Change in Control Event has occurred during the Performance Period and prior to the Colleague’s termination of employment, then except as otherwise provided in Section 1(a)(vi) of this Agreement, the Award will remain outstanding and the Earned Payout will be determined in accordance with Section 1(a)(i) of this Agreement.

(vi)If a Change in Control Event occurs prior to completion of the Performance Period, whether prior to or after Colleague’s termination of employment under circumstances in which the Award remains outstanding (as provided in Section 1(a)(v) of this Agreement), the Award shall be deemed earned as of the date of the Change in Control Event and the Earned Payout will be equal to the greater of the Target Award Amount or the amount calculated pursuant to Section 1(a)(ii) of this Agreement as if the Performance Period ended on the last day of the last completed calendar quarter preceding the date of the Change in Control Event and assuming for this purpose that the Section 162(m) Goal is achieved.

(vii)The date of the Award (the “Award Date”): March 11, 2015; and

(viii)The consideration, if any, for the Performance Units:  Colleague’s Employment with the Company.

(b)Performance Unit Account.  The Performance Units will be credited to Colleague’s Performance Unit Account as of the first day of the Performance Period and upon satisfaction of the conditions of this Agreement.

2.Performance Units.  Colleague hereby accepts the Performance Units and agrees with respect thereto as follows:

(a)Forfeiture. In the event of termination of Colleague’s employment with the Company or an employing subsidiary for any reason other than as provided in Section C of the Addendum prior to the last day of the Performance Period, Colleague shall, for no consideration, immediately forfeit to the Company the Performance Units.

(b)Lapse of Forfeiture Restrictions.  Except as provided in Section 2(a), the forfeiture restrictions lapse as to one hundred percent of the underlying Performance Units on the last day of the Performance Period; provided that Colleague has been

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continuously employed by the Company from the beginning of the Performance Period through the last day of the Performance Period.

Notwithstanding the foregoing, the forfeiture restrictions shall lapse as to the Performance Units earlier upon the termination and vesting events provided in Section C of the Addendum. In the event Colleague’s employment is terminated for any reason other than as provided in Section C of the Addendum, the Committee or its delegate, as appropriate, may, in the Committee’s or such delegate’s sole discretion, approve the lapse of forfeiture restrictions as to any or all Performance Units still subject to such conditions, such lapse to be effective on the date of such approval or Colleague’s termination date, if later.

(c)Performance Unit Account.  Colleague’s Performance Unit Account shall be a memorandum account on the books of the Company. The Performance Units credited to a Performance Unit Account shall be used solely as the basis for the determination of the amount of cash to be eventually distributed to Colleague in accordance with the Addendum to this Agreement. The Performance Units shall not be treated as property or as a trust fund of any kind. The Performance Units credited (and the amount of cash to which Colleague is entitled under the Plan) shall be subject to adjustment in accordance with the terms of the Plan.

(d)Nontransferability.  The Performance Units and the rights and interests of Colleague under this Agreement may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of prior to distribution.

3.Withholding of Tax.  The Company is authorized to withhold from any cash remuneration otherwise payable to Colleague pursuant to the Performance Unit Award any taxes required to be withheld by applicable law.

4.Limitation on Transfer.  Other than upon death or pursuant to a DRO, the Performance Units and all rights granted under this Agreement are personal to Colleague and cannot be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to execution, attachment or similar processes.

5.Plan and Addendum Incorporated/Availability.  Colleague acknowledges that the Company has made available a copy of the Plan and the Addendum to this Agreement, and agrees that this Performance Unit Award shall be subject to all of the terms and conditions set forth in the Plan and the Addendum, including future amendments thereto, if any, pursuant to the terms thereof, which Plan and Addendum are incorporated herein by reference as a part of this Agreement. In the event of any conflict between the Plan, the Addendum and this Agreement, the provisions of the Plan will prevail.  Colleague’s rights hereunder are subject to modification or termination in certain events, as provided in the Plan, including without limitation such rules and regulations as may from time to time be adopted or promulgated in accordance with paragraph 1.3 of the Plan.  Capitalized terms not defined in this Agreement shall have the meanings set forth in the Plan and the Addendum.

6.Employment Relationship.  For purposes of this Agreement, Colleague shall be considered to be in the employment of the Company as long as Colleague remains an employee of either the Company, any successor corporation or a parent or subsidiary corporation (as defined in section 424 of the Internal Revenue Code) of the Company or any

3

successor corporation.  Any question as to whether and when there has been a termination of such employment, and the cause of such termination, shall be determined by the Committee, or its delegate, as appropriate, and its determination shall be final.

7.Committee’s Powers.  No provision contained in this Agreement shall in any way terminate, modify or alter, or be construed or interpreted as terminating, modifying or altering any of the powers, rights or authority vested in the Committee or, to the extent delegated, in its delegate pursuant to the terms of the Plan or resolutions adopted in furtherance of the Plan, including, without limitation, the right to make certain determinations and elections with respect to the Performance Units.  All decisions of the Committee (as established pursuant to the Plan) with respect to any questions concerning the application, administration or interpretation of the Plan will be conclusive and binding on the Company and Colleague.

8.Binding Effect.  This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under Colleague.

9.Dispute Resolution.  If a dispute arises between Colleague and Company in connection with the Performance Unit Award, the dispute will be resolved by binding arbitration with the American Arbitration Association (AAA) in accordance with the AAA’s Commercial Arbitration Rules then in effect.

10.Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of California.

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer thereunto duly authorized, and Colleague has executed this Agreement, all as of March 11, 2015.

CITY NATIONAL CORPORATION
By:	/s/ Christopher J. Carey
Christopher J. Carey, Executive Vice
President, Chief Financial Officer
/s/ Russell Goldsmith
Russell Goldsmith

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EX-10.4

Exhibit 10.4

PERFORMANCE UNIT AWARD AGREEMENT

ADDENDUM

(PERFORMANCE METRICS BASED)

THIS ADDENDUM TO THE PERFORMANCE UNIT AWARD AGREEMENT provides the rules and procedures relating to the grant of the Performance Unit Award and the operation of the Performance Unit Account.

A.Definitions.  Any capitalized terms used, but not defined, in this Addendum shall have the meaning set forth in the Performance Unit Award Agreement (Performance Metrics Based).  Whenever the following terms are used in the Performance Unit Award Agreement or in this Addendum, they shall have the meaning specified below, unless the context clearly indicates to the contrary:

1.2008 Agreement means the Employment Agreement, dated as of December22, 2008, by and between Colleague and City National Corporation, as amended.

2.2010 Agreement means the Amended and Restated Employment Agreement made as of the 24th day of June, 2010, by and between Colleague, City National Bank and City National Corporation, as amended on March 14, 2012 and July 14, 2014.

3.Award Metrics means (1) Growth in Cumulative Actual Diluted Earnings Per Share, (2) Return on Tangible Common Equity, (3) Net Charge-Offs to Total Loans, and (4) Non-Performing Assets to Total Loans and Other Real Estate Owned.

4.Change in Control Event shall have the meaning assigned to it in the Plan.

5.Disability means Colleague shall become incapable of fulfilling his obligations because of injury or physical or mental illness which shall exist or may reasonably be anticipated to exist for a period of twelve (12) consecutive months or for an aggregate of twelve (12) months during any twenty-four (24) month period.

6.Growth in Cumulative Actual Diluted Earnings Per Share means the cumulative growth rate for the Company’s actual diluted earnings per share for each of the calendar years during the Performance Period. The cumulative growth rate is calculated by summing the earnings per share achieved in calendar years 2015, 2016, and 2017 and dividing by 3 times the value of the baseline earnings per share (which is the actual diluted earnings per share reported for calendar year 2014). For example, if earnings per share achieved in calendar years 2015, 2016, and 2017 were $5.50, $6.50, and $7.50, respectively, and the baseline earnings per share value was $4.50 (earnings per share achieved in calendar 2014), then the cumulative growth rate would equal 44.4%. In the event of a partial Performance Period, Growth in Cumulative Actual Diluted Earnings Per Share shall be determined using a weighted average for each calendar quarter included in the applicable Performance Period as reported by SNL Financial. For example, if earnings per share achieved in calendar year 2015 was $5.50 and earnings per share achieved in the first quarter of calendar year 2016 was $1.63, and the baseline earnings per share value was $4.50, then the cumulative growth rate would equal 26.8%.

7.Net Charge-Offs to Total Loans means the average of the annualized loans and leases charged off, net of recoveries, as a percent of total loans and leases, excluding covered loans as reported by SNL Financial, for each of the calendar years during the Performance Period.  In the event of a partial Performance Period, Net Charge-Offs to Total Loans shall be determined using a weighted

1

average for each calendar quarter included in the applicable Performance Period as reported by SNL Financial.

8.Non-Performing Assets to Total Loans and Other Real Estate Owned means the average of the annual non-performing assets excluding covered assets as a percent of total loans and other real estate owned, excluding covered assets, as reported by SNL Financial, for each of the calendar years during the Performance Period.  In the event of a partial Performance Period, Non-Performing Assets to Total Loans and Other Real Estate Owned shall be determined using a weighted average for each calendar quarter included in the applicable Performance Period as reported by SNL Financial.

9.Peer Banks means the component companies ranked as the 11th through 50th of the largest banks in the SNL Bank Index (but excluding the Company) as measured by assets based on the most recently available public data as of the first day of the Performance Period or if the SNL Bank Index is no longer maintained or is no longer appropriate, in the reasonable judgment of the Committee, the Peer Banks listed in any other reasonably comparable index prepared by a third party or the Committee of publicly-traded financial companies such that the Company falls between the 25th and 75th percentile in terms of size of market capitalization and/or assets.  If on the last day of the Performance Period, a Peer Bank would not otherwise qualify as a “Peer Bank” if the component companies were determined on the last day of the Performance Period, such Peer Bank shall be disregarded and shall not be replaced.

10.Performance Unit Account means the memorandum account maintained by the Company on behalf of Colleague which is credited with Performance Units.  Each Performance Unit represents the right to receive a distribution of cash in an amount as provided in the Performance Unit Award Agreement and this Addendum.

11.Return on Tangible Common Equity means the average of the annual return on tangible common equity, which excludes intangible assets and their related amortization expense, as reported by SNL Financial, for each of the calendar years during the Performance Period.  In the event of a partial Performance Period, Return on Tangible Common Equity shall be determined using a weighted average for each calendar quarter included in the applicable Performance Period as reported by SNL Financial.

B.Performance Unit Account.  As soon as practicable following the first day of the Performance Period, the Company shall credit Colleague’s Performance Unit Account with the Performance Units.

C.Lapse of Forfeiture Restrictions.  The Performance Unit Award is subject to forfeiture based on continued service until the forfeiture restrictions lapse in accordance with Section 2(b) of the Performance Unit Award Agreement.

Notwithstanding the forfeiture provision in Section 2(b) of the Performance Unit Award Agreement, the service-based forfeiture restrictions on the Performance Units shall immediately lapse:

·upon Colleague’s termination of employment by the Company without good cause or by Colleague for good reason (as those terms are defined in the 2010 Agreement) prior to a Change in Control Event;

·upon Colleague’s voluntary termination of employment for any reason or by the Company without good cause (as such term is defined in the 2010 Agreement) on or after expiration of the 2010 Agreement as provided in Section 10(f) of the 2010 Agreement prior to a Change in Control Event;

2

·upon Colleague’s termination of employment by the Company without cause or by Colleague for good reason (as those terms are defined in the 2008 Agreement) following a Change in Control Event; or

·upon Colleague’s termination of employment due to death or Disability.

D.Payment Date.

1.Except as set forth in paragraph 2 of this Section D, the Earned Payout as determined in Section 1(a)(ii) of the Performance Unit Award Agreement, if any, shall be distributed to Colleague (or, in the event of his death, Colleague’s Beneficiary) in cash in a lump sum payment as soon as reasonably practicable following the end of the Performance Period, but no later than seventy-five (75) days thereafter.

2.Subject to Section E, upon Colleague’s separation from service (within the meaning of Section 409A of the Code and the Treasury Regulations thereunder) following a Change in Control Event that results in the lapse of forfeiture restrictions as set forth in Section C of this Addendum, the payment shall be paid as soon as reasonably practicable following the date the lapse of forfeiture restrictions occurs, but in no event later than thirty (30) days (or such longer period, not to exceed seventy-five (75) days, as is required in order to determine the Earned Payout pursuant to Section 1(a)(vi) of the Performance Unit Award Agreement) thereafter; provided that if the Performance Units constitute nonqualified deferred compensation within the meaning of Section 409A of the Code, then this sentence shall only apply to the Performance Units if (a) such separation from service occurs within twenty four months following a Change in Control Event and (b) such Change in Control Event constitutes a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5). Except to the extent provided by the preceding sentence, the Earned Payout shall be paid according to the schedule set forth in paragraph 1 of this Section D.

E.Plan Construction.  It is the intent of the Company that the Performance Units shall comply with Section 409A of the Code, and the Performance Unit Award Agreement and this Addendum shall be interpreted in a manner which is consistent with the foregoing intent.  Any provisions of the Performance Unit Award Agreement and this Addendum which would not comply with the requirements of Section 409A of the Code and the Treasury Regulations adopted thereunder shall be deemed to be modified or eliminated in order to comply with these requirements.  Sections 10(h) and 24 of the 2010 Employment Agreement addressing the application of Section 409A of the Code are hereby incorporated by reference.  Notwithstanding anything in the Plan, the Performance Unit Award Agreement or the Addendum to the contrary, in the event of a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5), the Company may terminate the Performance Unit Awards granted hereunder in a manner consistent with Section 1.409A-3(j)(ix)(B) of the Treasury Regulations under Section 409A of the Code.

F.Unfunded Plan.  The liability of the Company to the Colleague under this Performance Unit Award Agreement shall be that of a debtor only pursuant to such contractual obligations as are created by the Plan, the Performance Unit Award Agreement and this Addendum, and no such obligation of the Company shall be deemed to be secured by any assets, pledges, or other encumbrances on any property of the Company.  The Company has not segregated or earmarked any of the Company’s assets for the benefit of Colleague or his beneficiary or estate, and the Plan does not, and shall not be construed to,

3

require the Company to do so.  Colleague and his beneficiary or estate shall have only an unsecured, contractual right against the Company with respect to any Performance Unit and such right shall not be deemed superior to the right of any other creditor.

G.Clawback.  Section 7(e) of the 2010 Agreement addressing clawback is hereby incorporated by reference.

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EX-10.5

Exhibit 10.5

ANNUAL STOCK UNIT AWARD AGREEMENT

UNDER THE

CITY NATIONAL CORPORATION

2008 OMNIBUS PLAN

THIS ANNUAL STOCKUNIT AWARD AGREEMENT is made by and between CITY NATIONAL CORPORATION, a Delaware corporation (the “Company”), and Russell Goldsmith, an employee of the Company or a subsidiary of the Company (“Colleague”), with reference to the following:

A.On April 23, 2008 the shareholders of the Company adopted the City National Corporation 2008 Omnibus Plan, as amended from time to time thereafter (the “Plan”), pursuant to which the Compensation, Nominating & Governance Committee of the Board of Directors (the “Committee”) may award selected officers and other Company or Company subsidiary employees Awards, including awards of restricted stock units payable solely in cash, or other deferred Awards of the Company’s common stock.

B.The Committee has determined to grant to Colleague an award of restricted stock units payable solely in cash and dividend equivalent units pursuant to the terms and conditions of this Agreement (“Annual Stock Unit Award”).

1.Grant of Annual Stock Unit Award.

(a)Details of Annual Stock Unit Award.  Pursuant to the Plan, the Company hereby grants an Annual Stock Unit Award with the following terms:

(i)On the Award Date, Colleague shall be granted an Annual Stock Unit Award with an aggregate Fair Market Value of $1,225,000 (the “Target Annual Stock Amount”).

(ii)The target number of restricted stock units to be awarded pursuant to the Annual Stock Unit Award shall be determined by dividing the Target Annual Stock Amount by the Fair Market Value of a Share on the Award Date (the “Restricted Stock Units”).

(iii)Except as otherwise provided in Section 1(a)(v) of this Agreement, the Restricted Stock Units shall be earned based on the achievement of the Company’s net income goal (the “Performance Goal”) established by the Committee for the  Performance Period, measured without regard to any costs and expenses associated with any transactions constituting a Change in Control Event or any non-recurring charges that would not reasonably be expected to have been incurred by Company and its subsidiaries had the transactions constituting a Change in Control Event not arose.  The number of earned Restricted Stock Units shall be determined by calculating the

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Performance Goal achievement and determining the corresponding percentage of Restricted Stock Units that become earned Restricted Stock Units in accordance with the following table.  The percentage of Restricted Stock Units that become earned if the performance is between the levels specified in the table below will be determined on a straight line basis.  Any Restricted Stock Units that do not become earned will be forfeited.

Level of Performance Goal Achievement	Earned Restricted Stock Units as a Percentage of Total Restricted Stock Units
75% of target and above	100	%
62.5% of target	75	%
50% of target	50	%
Below 50% of target	0	%

(iv)The Performance Period means the period commencing on January 1, 2015 and ending on December 31, 2015.

(v)If Colleague’s employment is terminated during the Performance Period in circumstances that result in a lapse of the service-based forfeiture restrictions applicable to the Restricted Stock Units pursuant to Section D of the Addendum then (A) if no Change in Control Event has occurred during the Performance Period and prior to such termination, the Restricted Stock Units will remain outstanding and the number of earned Performance Units will be determined based on actual achievement of the Performance Goal through the end of the Performance Period or (B) if a Change in Control Event has occurred during the Performance Period and prior to such termination, then one hundred percent (100%) of the Restricted Stock Units will become earned as of the date of termination.

(vi)The date of the Annual Stock Unit Award (the “Award Date”):  February 25, 2015; and

(vii)The consideration, if any, for the Annual Stock Unit Award:  Colleague’s Employment with the Company.

(b)Restricted Stock Unit Account.  The target number of Restricted Stock Units will be credited to Colleague’s Restricted Stock Unit Account as of the Award Date and upon satisfaction of the conditions of this Agreement.

2.Annual Stock Unit Award.  Colleague hereby accepts the Annual Stock Unit Award and agrees with respect thereto as follows:

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(a)Forfeiture. In the event of termination of Colleague’s employment with the Company or an employing subsidiary for any reason other than as provided in Section D of the Addendum prior to the last Vesting Date set forth in Section 2(b) of this Agreement, Colleague shall, for no consideration, immediately forfeit to the Company the Restricted Stock Units.

(b)Lapse of Forfeiture Restrictions.  All earned Restricted Stock Units are subject to forfeiture based on continued service, as provided in subparagraph (a), until the forfeiture restrictions lapse in accordance with the following schedule provided that Colleague has been continuously employed by the Company from the Award Date through the lapse date:

Time From	Percentage of
Date of Award	Restrictions Which		Total Percentage of
(“Vesting Date”)	Lapse (Vesting)		Restrictions Lapsed
After 1 year	0	%	0	%
After 2 years	25	%	25	%
After 3 years	25	%	50	%
After 4 years	25	%	75	%
After 5 years	25	%	100	%

Notwithstanding the foregoing, the forfeiture restrictions shall lapse as to all of the Restricted Stock Units earlier upon the termination and vesting events provided in Section D of the Addendum.  In the event Colleague’s employment is terminated for any reason other than as provided in Section D of the Addendum, the Committee or its delegate, as appropriate, may, in the Committee’s or such delegate’s sole discretion, approve the lapse of forfeiture restrictions as to any or all Restricted Stock Units still subject to such conditions, such lapse to be effective on the date of such approval or Colleague’s termination date, if later.

(c)Restricted Stock Unit Account/Dividend Equivalent Unit Accounts.  Colleague’s Restricted Stock Unit Account and Dividend Equivalent Unit Account shall be memorandum accounts on the books of the Company. The Restricted Stock Units credited to the Restricted Stock Unit Account and the Dividend Equivalent Units credited to Colleague’s Dividend Equivalent Unit Account shall be used solely as the basis for the determination of the amount of cash to be eventually distributed to Colleague in accordance with the Addendum to this Agreement. The Restricted Stock Units and the Dividend Equivalent Units shall not be treated as property or as a trust fund of any kind. Colleague shall not be entitled to any voting or other stockholder rights with respect to Restricted Stock Units awarded or credited under the Plan.  The number of Restricted Stock Units credited (and the amount of cash to which Colleague is entitled under the Plan) shall be subject to adjustment in accordance with the terms of the Plan.

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(d)Dividend Equivalents.

(i)Colleague’s Dividend Equivalent Unit Account shall be credited with Dividend Equivalent Units in an amount equal to the dividend per Share for the applicable dividend payment date (which, in the case of any dividend distributable in property other than Shares, shall be the per Share value of such dividend, as determined by the Company for purposes of income tax reporting) times the number of Restricted Stock Units held by Colleague on the record date for the payment of such dividend.

(ii)Colleague’s Dividend Equivalent Unit Account shall be subject to adjustment in the event that Colleague’s Restricted Stock Unit Account is adjusted pursuant to Section 1(a)(iii) or (v) of this Agreement).  In the event that Colleague’s Restricted Stock Unit Account is adjusted pursuant to Section 1(a)(iii) or (v) of this Agreement, the Dividend Equivalent Unit Account shall be adjusted to reflect the Dividend Equivalent Units equal to the dividend per Share for the applicable dividend payment date times the number of Restricted Stock Units earned in accordance with Section 1(a)(iii) or (v) of this Agreement which shall be deemed to have been held by Colleague on the record date for the payment of such dividend.

(iii)Dividend Equivalent Units credited to Colleague’s Dividend Equivalent Unit Account shall vest and be paid on the same basis and at the same time as the underlying Restricted Stock Units for which such Dividend Equivalent Units were credited vest and are paid, and may be subject to forfeiture in the same manner as the underlying Restricted Stock Units for which such Dividend Equivalent Units were credited, in any case, subject to adjustment as provided herein.

(e)Nontransferability.  The Annual Stock Unit Award, the Restricted Stock Units and the Dividend Equivalent Units and the rights and interests of Colleague under this Agreement may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of prior to distribution.

3.Withholding of Tax.  The Company is authorized to withhold from any cash remuneration otherwise payable to Colleague pursuant to this Agreement and the Addendum any taxes required to be withheld by applicable law.

4.Limitation on Transfer.  Other than upon death or pursuant to a DRO, the Restricted Stock Units and the Dividend Equivalent Units and all rights granted under this Agreement are personal to Colleague and cannot be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to execution, attachment or similar processes.

5.Plan and Addendum Incorporated/Availability.  Colleague acknowledges that the Company has made available a copy of the Plan and the Addendum to this Agreement, and agrees that this Annual Stock Unit Award, Restricted Stock Units and

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Dividend Equivalent Units award shall be subject to all of the terms and conditions set forth in the Plan and the Addendum, including future amendments thereto, if any, pursuant to the terms thereof, which Plan and Addendum are incorporated herein by reference as a part of this Agreement. In the event of any conflict between the Plan, the Addendum and this Agreement, the provisions of the Plan will prevail.  Colleague’s rights hereunder are subject to modification or termination in certain events, as provided in the Plan, including without limitation such rules and regulations as may from time to time be adopted or promulgated in accordance with paragraph 1.3 of the Plan.  Capitalized terms not defined in this Agreement shall have the meanings set forth in the Plan and the Addendum.

6.Employment Relationship.  For purposes of this Agreement, Colleague shall be considered to be in the employment of the Company as long as Colleague remains an employee of either the Company, any successor corporation or a parent or subsidiary corporation (as defined in section 424 of the Internal Revenue Code) of the Company or any successor corporation.  Any question as to whether and when there has been a termination of such employment, and the cause of such termination, shall be determined by the Committee, or its delegate, as appropriate, and its determination shall be final.

7.Committee’s Powers.  No provision contained in this Agreement shall in any way terminate, modify or alter, or be construed or interpreted as terminating, modifying or altering any of the powers, rights or authority vested in the Committee or, to the extent delegated, in its delegate pursuant to the terms of the Plan or resolutions adopted in furtherance of the Plan, including, without limitation, the right to make certain determinations and elections with respect to the Annual Stock Unit Award, Restricted Stock Units and Dividend Equivalent Units.  All decisions of the Committee (as established pursuant to the Plan) with respect to any questions concerning the application, administration or interpretation of the Plan will be conclusive and binding on the Company and Colleague.

8.Binding Effect.  This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under Colleague.

9.Dispute Resolution.  If a dispute arises between Colleague and Company in connection with the Annual Stock Unit Award, including the Restricted Stock Units and Dividend Equivalent Units, the dispute will be resolved by binding arbitration with the American Arbitration Association (AAA) in accordance with the AAA’s Commercial Arbitration Rules then in effect.

10.Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of California.

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer thereunto duly authorized, and Colleague has executed this Agreement, all effective as of March 11, 2015.

CITY NATIONAL CORPORATION
By:	/s/ Christopher J. Carey
Christopher J. Carey, Executive Vice
President, Chief Financial Officer
/s/ Russell Goldsmith
Russell Goldsmith

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EX-10.6

Exhibit 10.6

ANNUAL STOCK UNIT AWARD AGREEMENT

ADDENDUM

THIS ADDENDUM TO THE ANNUAL STOCK UNIT AWARD AGREEMENT provides the rules and procedures relating to the grant of the Annual Stock Unit Award and the operation of the Restricted Stock Unit Account and the Dividend Equivalent Unit Account.

A.Definitions.  Any capitalized terms used, but not defined, in this Addendum shall have the meaning set forth in the Annual Stock Unit Award Agreement.  Whenever the following terms are used in the Annual Stock Unit Award Agreement or in this Addendum, they shall have the meaning specified below, unless the context clearly indicates to the contrary:

1.2008 Agreement means the Employment Agreement, dated as of December 22, 2008, by and between Colleague and City National Corporation, as amended.

2.2010 Agreement means the Amended and Restated Employment Agreement made as of the 24th day of June, 2010, by and between Colleague, City National Bank and City National Corporation, as amended on March 14, 2012 and July 14, 2014.

3.Change in Control Event shall have the meaning assigned to it in the Plan.

4.Disability means Colleague shall become incapable of fulfilling his obligations because of injury or physical or mental illness which shall exist or may reasonably be anticipated to exist for a period of twelve (12) consecutive months or for an aggregate of twelve (12) months during any twenty-four (24) month period.

5.Dividend Equivalent Unit Account means the memorandum account maintained by the Company or its agent on behalf of Colleague which is credited with Dividend Equivalent Units.

6.Dividend Equivalent Unit means a unit of measurement which is deemed for bookkeeping and payment purposes to represent one dollar ($1.00).

7.Fair Market Value shall have the meaning assigned to it in the Plan.

8.Restricted Stock Unit means a non-voting unit of measurement which is deemed for bookkeeping and payment purposes to represent one outstanding share of Common Stock of the Company.

9.Restricted Stock Unit Account means the memorandum account maintained by the Company on behalf of each Colleague which is credited with Restricted Stock Units under the Annual Stock Unit Award Agreement.  Each Restricted Stock Unit represents the right to receive a distribution of cash in the amount of the Fair Market Value of one Share at the date of distribution as provided in the Annual Stock Unit Award Agreement and this Addendum.

10.Shares shall have the meaning assigned to it in the Plan.

11.Vested RSUs means the earned Restricted Stock Units (determined in accordance with Section 1(a) of the Annual Stock Unit Award Agreement) with respect to which the forfeiture restrictions set forth in Section 2(b) of the Annual Stock Unit Award Agreement have lapsed.

B.Restricted Stock Unit Account.  As soon as practicable following the Award Date, the Company shall credit Colleague’s Restricted Stock Unit Account with the target number of Restricted Stock Units awarded determined in accordance with Section 1(a)(ii) of the Annual Stock Unit Award Agreement.

C.Dividend Equivalent Unit Account. As soon as practical following each of the Company’s dividend payable dates, Colleague’s Dividend Equivalent Unit Account shall be credited with the number of Dividend Equivalent Units equal to the dividends paid by the Company during the quarter on a number of Shares equal to the aggregate number of Restricted Stock Units credited to Colleague’s Restricted Stock Unit Account as of the record date for such quarter’s dividend payment.

D.Lapse of Forfeiture Restrictions.  The Restricted Stock Units are subject to forfeiture based on continued service until the forfeiture restrictions lapse in accordance with Section 2(b) of the Annual Stock Unit Award Agreement.

Notwithstanding the forfeiture provision in Section 2(b) of the Annual Stock Unit Award Agreement, the service-based forfeiture restrictions on the Restricted Stock Units shall immediately lapse:

·upon Colleague’s termination of employment by the Company without good cause or by Colleague for good reason (as those terms are defined in the 2010 Agreement) prior to a Change in Control Event;

·upon Colleague’s voluntary termination of employment for any reason or by the Company without good cause (as such term is defined in the 2010 Agreement) on or after expiration of the 2010 Agreement as provided in Section 10(f) of the 2010 Agreement and prior to a Change in Control Event;

·upon Colleague’s termination of employment by the Company without cause or by Colleague for good reason (as those terms are defined in the 2008 Agreement) following a Change in Control Event; or

·upon Colleague’s termination of employment due to death or Disability.

E.Distributions.

1.Subject to Section G, the Vested RSUs with respect to which the forfeiture restrictions as set forth in Paragraph 2(b) of Colleague’s Annual Stock Unit Award Agreement lapse on a Vesting Date and the Dividend Equivalent Units credited to Colleague’s Dividend Equivalent Unit Account in respect of such Vested RSUs shall be converted to cash as of the Vesting Date and be paid to Colleague (or, in the event of his or her death, Colleague’s Beneficiary) in a lump sum payment as soon as reasonably practicable following the Vesting Date, but in no event later than thirty (30) days thereafter.

2.Subject to Section G, the Vested RSUs with respect to which the forfeiture restrictions as set forth in Paragraph 2(b) of the Colleague’s Annual Stock Unit Award Agreement lapse upon an event specified in Section D of this Addendum and the Dividend Equivalent Units credited to Colleague’s  Dividend Equivalent Unit Account in respect of such Vested RSUs shall be converted to cash as of the date of the applicable event specified in Section D of this Addendum and paid (a) if the applicable event specified in Section D occurs on or after the first February 15 following the end of the Performance Period, as soon as reasonably practicable (but in no event later than thirty (30) days following such event) or (b) if the applicable event set forth in Section D occurs prior to the first February 15 following the end of the Performance Period, during the seventy-five (75) day period beginning on the first January 1 following the end of the Performance Period; provided that, notwithstanding the foregoing, if the applicable event set forth in Section D occurs within twenty-four months following a Change in Control Event that constitutes a “change in control event” within the meaning of Treasury Regulation

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Section 1.409A-3(i)(5), payment will be made as soon as reasonably practicable (but in no event later than thirty (30) days following the occurrence of such event set forth in Section D).

F.Adjustments in Case of Changes in Common Stock.  If there shall occur any change in the outstanding Shares of the Company’s Common Stock such as described in Section 6.2(a) of the Plan, the Company shall make such proportionate and equitable adjustments consistent with the effect of such event on stockholders generally, as the Committee determines to be necessary or appropriate, in the number, kind and/or character of Colleague’s Restricted Stock Units or other securities, property and/or rights contemplated hereunder, including any appropriate adjustments to the market prices used in the determination of the number and Restricted Stock Units, and in rights in respect of Colleague’s Restricted Stock Unit Account credited under Colleague’s Annual Stock Unit Award Agreement so as to preserve the benefits intended.

G.Plan Construction.  It is the intent of the Company that the Annual Stock Unit Award shall comply with Section 409A of the Code, and the Annual Stock Unit Award Agreement and this Addendum shall be interpreted in a manner which is consistent with the foregoing intent.  Any provisions of the Annual Stock Unit Award Agreement and this Addendum which would not comply with the requirements of Section 409A of the Code and the Treasury Regulations adopted thereunder shall be deemed to be modified or eliminated in order to comply with these requirements.  Sections 10(h) and 24 of the 2010 Employment Agreement addressing the application of Section 409A of the Code is hereby incorporated by reference.  Notwithstanding anything in the Plan, the Annual Stock Unit Award Agreement or the Addendum to the contrary, in the event of a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5), the Company may terminate the Annual Stock Unit Award granted hereunder in a manner consistent with Section 1.409A-3(j)(ix)(B) of the Treasury Regulations under Section 409A of the Code.

H.Unfunded Plan.  The liability of the Company to Colleague under the Annual Stock Unit Award Agreement shall be that of a debtor only pursuant to such contractual obligations as are created by the Plan, the Annual Stock Unit Award Agreement and this Addendum, and no such obligation of the Company shall be deemed to be secured by any assets, pledges, or other encumbrances on any property of the Company.  The Company has not segregated or earmarked any of the Company’s assets for the benefit of Colleague or his beneficiary or estate, and the Plan does not, and shall not be construed to, require the Company to do so.  Colleague and his beneficiary or estate shall have only an unsecured, contractual right against the Company with respect to any Annual Stock and such right shall not be deemed superior to the right of any other creditor.

G.Clawback.  Section 7(e) of the 2010 Agreement addressing clawback is hereby incorporated by reference.

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EX-10.7

Exhibit 10.7

ELEVENTH AMENDMENT TO EMPLOYMENT AGREEMENT

THIS ELEVENTH AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”) is dated as of   February 27  , 2015, by and between BRAM GOLDSMITH (“Goldsmith”), on the one hand, and CITY NATIONAL CORPORATION, a Delaware corporation (“CNC”) and CITY NATIONAL BANK, a national banking association (“CNB”), on the other hand.

WHEREAS, the parties have entered into that certain Employment Agreement, dated as of May 15, 2003, as amended (as amended, the “Agreement”);

WHEREAS, the initial term of the Agreement was two years from May 15, 2003 to May 15, 2005;

WHEREAS, at various times, the Agreement has been amended to extend the term for an additional two years to May 15, 2007, further amended to extend the term for an additional year to May 14, 2008, further amended to extend the term for an additional year until May 14, 2009, further amended December 22, 2008 in recognition of the requirements of Internal Revenue Code § 409A, further amended to extend the term for an additional year to May 14, 2010, further amended to extend the term for an additional year until May 14, 2011, further amended to extend the term for an additional year until May 14, 2012, further amended to extend the term for an additional year until May 14, 2013; and further amended to extend the term for an additional year until May 14, 2014; and further amended to extend the term for an additional year until May 14, 2015;

WHEREAS, the parties have mutually agreed to change Goldsmith’s role on the Board of Directors of CNC to that of Chairman Emeritus effective October 1, 2013;

WHEREAS, the parties now wish to further extend the term of the Agreement for an additional period of time on substantially the same terms and conditions presently in effect but with modifications to Goldsmith’s title and benefits under the City National Corporation Strategy and Planning Committee Change in Control Severance Plan (the “CIC Severance Plan”) which would be effective, if at all, upon completion of the merger contemplated by the Agreement and Plan of Merger, dated as of January 22, 2015, by and among CNC, Royal Bank of Canada (“RBC”) and RBC USA Holdco Corporation (the date of such completion, the “Effective Date”); and

WHEREAS, the Board of Directors of CNB and of CNC have each approved such extension of the term of the Agreement through May 14, 2016 and, if the Effective Date occurs prior to May 14, 2016 and Goldsmith remains employed on the Effective Date, through the second anniversary of the Effective Date;

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.The term of the Agreement is hereby initially extended through May 14, 2016 and, if the Effective Date occurs prior to May 14, 2016 and Goldsmith remains employed on the Effective Date, further extended through the second anniversary of the Effective Date;

2.During the term of the Agreement, as extended hereby, Goldsmith shall be employed as an unspecified officer of CNB;

3.Through the earlier of the Effective Date and May 14, 2016, Goldsmith shall also continue to be employed as Chairman Emeritus of the Board of Directors of CNC;

4.Upon the Effective Date, subject to Goldsmith’s continued employment through such date, Goldsmith shall be entitled to receive from CNC or its successor a lump sum payment in the gross amount of $1,500,000.00 (One Million Five Hundred Thousand Dollars and No Cents), less applicable mandatory state and federal withholdings, in full satisfaction of his participation in and continued eligibility for any benefits under the CIC Severance Plan; such payment to be made within thirty days of the Effective Date;

5.Except as amended hereby, the Agreement shall remain in full force and effect with respect to all other terms and conditions currently in effect;

6.All capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Agreement; and

7.This Amendment shall be governed by, and construed in accordance with the laws of the State of California.

IN WITNESS WHEREOF, the parties hereto have executed this ELEVENTH Amendment to their Employment Agreement dated May 15, 2003, as of the date first written above.

/s/ BRAM GOLDSMITH
Bram Goldsmith
CITY NATIONAL CORPORATION		CITY NATIONAL BANK
By:	/s/ MICHAEL B. CAHILL	By:	/s/ MICHAEL B. CAHILL
Name:	Michael B. Cahill	Name:	Michael B. Cahill
Title:	EVP, Secretary & General Counsel	Title:	EVP, Secretary & General Counsel

EX-10.8

Exhibit 10.8

RESTRICTED STOCK AWARD AGREEMENT

UNDER THE

CITY NATIONAL CORPORATION

2008 OMNIBUS PLAN

RESTRICTED STOCK AWARD AGREEMENT made as of , between CITY NATIONAL CORPORATION, a Delaware corporation (the “Company”), and , an employee of the Company or a subsidiary of the Company (“Colleague”), with reference to the following:

A.         On April 23, 2008 the shareholders of the Company adopted the City National Corporation 2008 Omnibus Plan as amended from time to time thereafter, (the “Plan”), pursuant to which the Compensation, Nominating & Governance Committee of the Board of Directors (the “Committee”) may award selected officers and other Company or Company subsidiary employees restricted shares of the Company’s common stock, (the “Common Stock”).

B.          The Committee has determined to grant to Colleague an award of restricted shares of Stock pursuant to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals and the performance of the mutual covenants contained herein, it is hereby agreed as follows:

1.         Grant of Restricted Stock Award.

(a)        Details of Award. The Company hereby grants a Restricted Stock Award (as defined in the Plan), upon the terms and conditions set forth in this Agreement, with the following terms:

(i)         Number of Shares to be issued:  Shares (the “Restricted Shares”) of Stock;

(ii)        The date of issuance:  (the “Award Date”); and

(iii)       The consideration, if any, for the Restricted Shares:  Colleague’s employment with the Company.

(b)        Issuance of Restricted Shares.  The Restricted Shares shall be issued upon acceptance hereof by Colleague and upon satisfaction of the conditions of this Agreement.

2.         Restricted Shares.  Colleague hereby accepts the Restricted Shares when issued and agrees with respect thereto as follows:

(a)        Forfeiture Restrictions.  The Restricted Shares may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of (the “Forfeiture Restrictions”) to the extent that Forfeiture Restrictions have not lapsed. In the event of termination of Colleague’s employment with the Company or employing subsidiary for any reason other than (i) death or (ii) Total Disability, except as otherwise provided in the last sentence of subparagraph (b) of this Paragraph 2, Colleague shall, for no consideration, forfeit to the Company all Restricted Shares to the extent then subject to the Forfeiture Restrictions. The Forfeiture Restrictions shall be binding upon and enforceable against any transferee of Restricted Shares.

(b)        Lapse of Forfeiture Restrictions.  The Forfeiture Restrictions shall lapse as to the Restricted Shares in accordance with the following schedule provided that Colleague has been continuously employed by the Company from the Award Date through the lapse date:

Time from Date of Award	Restricted Stock Vesting		Total PercentageRestrictions Lapsed
After 1 year	0	%	0	%
After 2 years	25	%	25	%
After 3 years	25	%	50	%
After 4 years	25	%	75	%
After 5 years	25	%	100	%

Notwithstanding the foregoing, the Forfeiture Restrictions shall lapse as to all of the Restricted Shares on the earlier of the date Colleague’s employment with the Company is terminated by reason of death or Total Disability. In the

event Colleague’s employment is terminated for any other reason, the Committee or its delegate, as appropriate, may, in the Committee’s or such delegate’s sole discretion, approve the lapse of Forfeiture Restrictions as to any or all Restricted Shares still subject to such restrictions, such lapse to be effective on the date of such approval or Colleague’s termination date, if later.

(c)        Certificates/Shareholder Rights. Shares of Restricted Stock will be evidenced by memorandum entries on the records of the Company’s transfer agent. Colleague shall have voting rights and shall be entitled to receive all dividends unless and until the Restricted Shares are forfeited pursuant to the provisions of this Agreement. Cash dividends paid on Shares of Common Stock will be paid to Colleague for the Restricted Shares on the same date as paid to other Shareholders.  Upon request of the Committee or its delegate, Colleague shall deliver to the Company a stock power, endorsed in blank, relating to the Restricted Shares then subject to the Forfeiture Restrictions.  Upon the lapse of the Forfeiture Restrictions, the Company shall cause the shares to be issued to your broker, per your election on file, in the name of the colleague, or such other name as provided in the Plan, for the Shares upon which Forfeiture Restrictions lapsed.  Notwithstanding any other provisions of this Agreement, the issuance or delivery of any shares of Common Stock (whether subject to restrictions or unrestricted) may be postponed for such period as may be required to comply with applicable requirements of any national securities exchange or any requirements under any law or regulation applicable to the issuance or delivery of such Shares.  The Company shall not be obligated to issue or deliver any shares of Common Stock if the issuance or delivery thereof shall constitute a violation of any provision of any law or of any regulation of any governmental authority or any national securities exchange.

3.         Withholding of Tax.  The receipt of Restricted Shares or the lapse of any Forfeiture Restrictions may result in income to you for federal or state tax purposes.  To the extent that you become subject to taxation, you shall deliver to the Company at the time of such receipt or lapse, as the case may be, such amount of money or Shares of unrestricted Common Stock, as the Company may require to meet its withholding obligation under applicable tax laws or regulations.  If you fail to do so, the Company is authorized to withhold from any cash or stock remuneration then or thereafter payable to you any tax required to be withheld by reason of such resulting compensation income.  Your delivery of Shares to meet the tax withholding obligation is subject to the Company’s Securities Trading Policy as may be in effect from time to time.  You must have owned any Common Stock you deliver for at least six months.   Any Common Stock you deliver or which is withheld by the Company will be valued on the date of which the amount of tax to be withheld is determined.  Any fractional Shares of Common Stock resulting from withholding of taxes will be paid to you in cash.

4.         Status of Common Stock.  Colleague agrees that the Restricted Shares to which the restrictions have lapsed will not be sold or otherwise disposed of in any manner which would constitute a violation of any applicable federal or state securities laws.  Colleague also agrees (i) that the certificates representing the Shares may bear such legend or legends as the Company deems appropriate in order to assure compliance with applicable securities laws, (ii) that the Company may refuse to register the transfer of the Shares on the stock transfer records of the Company if such proposed transfer would be in the opinion of counsel satisfactory to the Company constitute a violation of any applicable securities law and (iii) that the Company may give related instructions to its transfer agent, if any, to stop registration of the transfer of the Shares.

5.         Limitation on Transfer.  Other than upon death or pursuant to a DRO, the Restricted Shares and all rights granted under this Agreement are personal to Colleague and cannot be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to execution, attachment or similar processes.

6.         Employment Relationship.  For purposes of this Agreement, Colleague shall be considered to be in the employment of the Company as long as Colleague remains a Colleague of either the Company, any successor corporation or a parent or subsidiary corporation (as defined in section 424 of the Internal Revenue Code) of the Company or any successor corporation.

Any question as to whether and when there has been a termination of such employment, and the cause of such termination, shall be determined by the Committee, or its delegate, as appropriate, and its determination shall be final.

Neither the Plan nor this Agreement shall constitute a contract of employment between the Company, including, any successor corporation or a parent or subsidiary corporation of the Company or any successor corporation and Colleague.  Colleague is an at-will employee except as provided in any other written agreement.  Nothing contained in the Plan or the Agreement (or any Award made pursuant to the Plan) shall confer upon any eligible Participant any right to continue in the employment of the Company, or guarantee of payment of future incentives, or shall interfere with, affect or restrict in any way, the rights of the Company, which are expressly reserved, to discharge Colleague, any time for any reason whatsoever, with or without cause.

7.         Availability of Plan/Plan Incorporated.  Colleague acknowledges that the Company has made available a copy of the Plan, and agrees that this Award of Restricted Shares shall be subject to all of the terms and conditions set forth in the Plan, including future amendments thereto, if any, pursuant to the terms thereof, which Plan is incorporated herein by reference as a part of this Agreement. In the event of any conflict between the Plan and this Agreement, the provisions of the Plan will prevail.  Colleague’s rights hereunder are subject to modification or termination in certain events, as provided in the Plan, including without limitation such rules and regulations as may from time to time be adopted or promulgated in accordance with paragraph 1.3 of the Plan.  Capitalized terms not defined in this Agreement shall have the meanings set forth in the Plan.

8.    Committee’s Powers.  No provision contained in this Agreement shall in any way terminate, modify or alter, or be construed or interpreted as terminating, modifying or altering any of the powers, rights or authority vested in the Committee or, to the extent delegated, in its delegate pursuant to the terms of the Plan or resolutions adopted in furtherance of the Plan, including, without limitation, the right to make certain determinations and elections with respect to the Restricted Shares. All decisions of the Committee (as established pursuant to the Plan) with respect to any questions concerning the application, administration or interpretation of the Plan will be conclusive and binding on the Company and Colleague.

9.         Binding Effect.  This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under Colleague.

10.       Dispute Resolution.  If a dispute arises between Colleague and Company in connection with the Restricted Stock Award, the dispute will be resolved by binding arbitration with the American Arbitration Association (AAA) in accordance with the AAA’s Commercial Arbitration Rules then in effect.

11.       Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of California.

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer thereunto duly authorized, and Colleague has executed this Agreement, all as of the date first above written.

By:

Christopher J. Carey,

Executive Vice President, Chief Financial Officer

EX-10.9

Exibit 10.9

STOCK OPTION AWARD AGREEMENT

UNDER THE

CITY NATIONAL CORPORATION

2008 OMNIBUS PLAN

This Stock Option Agreement is made and entered into as of  ###GRANT_DATE###, by and between City National Corporation, a Delaware corporation (the “Company”), and ###PARTICIPANT_NAME###, an employee of the Company or a subsidiary of the Company (the “Optionee”), with reference to the following:

A.On April 23, 2008 the shareholders of the Company adopted the City National Corporation 2008 Omnibus Plan as amended from time to time thereafter, (the “Plan”), pursuant to which the Compensation, Nominating & Governance Committee of the Board of Directors (the “Committee”) may grant selected officers and other Company or Company subsidiary employees options to purchase shares of the Company’s common stock, $1.00 par value (the “Common Stock”).

B.The Committee has determined to grant Optionee an Option to purchase shares of x Common Stock pursuant to the terms and conditions of this Agreement.  This Option is not an Incentive Stock Option, as that term is defined in Section 422 of the Internal Revenue Code and Treasury regulations thereunder.

NOW, THEREFORE, in consideration of the foregoing recitals and the performance of the mutual covenants contained herein, it is hereby agreed as follows:

1.Grant of Option.  The Company hereby grants to Optionee the right and option to purchase (the “Option”), upon the terms and conditions set forth in this Agreement, all or any part of the following number of Shares of Common Stock at the following price per share:

Number of Shares	Price Per Share
###TOTAL_AWARDS###	###GRANT_PRICE###

The number of shares subject to the Option and the Option exercise price are subject to adjustment in certain events, as provided in the Plan.

2.Time of Exercise.  The Option will vest and may be exercised at any time and from time to time after the dates set forth in the following schedule and before the Termination Date (as defined below) as to all or any number of full Shares not exceeding in the aggregate that percentage of all of the Shares set forth opposite each such date:

Time from Date of Grant	Options Vesting	Total Percentage of Shares as to which Options May be Exercised
After 1 year	25%	25%
After 2 years	25%	50%
After 3 years	25%	75%
After 4 years	25%	100%
After 10 years (the “Termination Date”)		Any unexercised Options will expire at this time

Notwithstanding the foregoing, all of the Options shall immediately vest on the date Optionee’s employment with the Company is terminated by reason of death or Total Disability. In the event Colleague’s employment is terminated for any other reason, the Committee or its delegate, as appropriate, may, in the Committee’s or such delegate’s sole discretion, approve the vesting as to any or all Options still subject to vesting, such vesting to be effective on the date of such approval or Optionee’s termination date, if later.

3.Method of Exercise.  The Option or any part thereof may be exercised utilizing the online software tool provided through the Company’s third party administration vendor following the vendor’s exercise steps and process. Subject to the Company’s Securities Trading Policy as may be in effect from time to time, payment of the grant price may be in cash, in Shares of Common Stock, or in a broker-assisted same-day sale transaction or a combination thereof.  If any part of such payment consists of Common Stock, such Common Stock must have been owned for at least six months and will be valued at the last sale price of such Common

Stock as reported by the New York Stock Exchange on the date of exercise.  If any part of such payment consists of money paid by you or Common Stock, delivery of such money or Common Stock must be received by the Company’s Controller’s Office no later than three (3) business days following your exercise.  If Optionee’s notice is received by the third party administration vendor before 1:00 p.m (PT), the date of exercise of the Option will be the date of receipt by the vendor.  The exercise date for notices received after 1:00 p.m. (PT) will be the business day following the date of receipt by the vendor.  Not less than 100 Shares may be purchased at any one time unless the Shares purchased are all of the Shares then purchasable under the Option.

The Company shall cause the shares to be delivered to your broker per your instructions.  provided, however, that if any federal or state law or regulation of any securities exchange listing the Company’s Shares requires the Company to take any action with respect to the exercised Share before issuance thereof, then the date for issuance and delivery of such Shares will be extended for the period of time necessary to take such action.

4.Withholding of Tax.  The exercise of Non-Qualified Stock Options may result in income to you for federal or state tax purposes.  To the extent that you become subject to taxation, you shall deliver to the Company at the time of such exercise such amount of money or Shares of unrestricted Common Stock, as the Company may require to meet its withholding obligation under applicable tax laws or regulations.  If you fail to do so, the Company is authorized to withhold from any cash or stock remuneration then or thereafter payable to you any tax required to be withheld by reason of such resulting compensation income.  If you exercise Stock Options through a cashless transaction, taxes will be withheld from the proceeds of the sale of Shares.   Your delivery of Shares to meet the tax withholding obligation is subject to the Company’s Securities Trading Policy as may be in effect from time to time.  You must have owned any Common Stock you deliver for at least six months. Any Common Stock you deliver or which is withheld by the Company will be valued on the date of which the amount of tax to be withheld is determined.  Any fractional Shares of Common Stock resulting from withholding of taxes will be paid to you in cash.

5.Expiration of Options after Termination.  Stock Options and all rights granted under this Agreement, to the extent such rights have not been exercised, will terminate on the earlier of the Termination Date or the earliest to occur of the following:

5.1   Immediately upon termination of Optionee’s employment for cause or any resignation which is in lieu of a termination for cause, as defined below.

5.2   If the employment of the Optionee terminates for any reason other than for cause, death, Retirement, Total Disability or disability, three (3) months after the date of such termination.

5.3   If Optionee’s employment terminates by reason of Retirement, Total Disability or disability, three (3) years after the date of such termination.

5.4   If Optionee dies while employed by the Company or within three (3) months after Optionee’s employment is terminated under the conditions specified in subparagraph 5.2 or 5.3 above,  one (1) year after death.  After the Optionee’s death, the Option and all rights granted under this Agreement, to the extent such rights will not theretofore have been exercised, may be exercised by Optionee’s designated Beneficiary, or if none, by the Optionee’s personal representative or by the person or persons to whom the Option will pass by will or by the applicable laws of descent and distribution.

Termination of Optionee’s employment with the Company to accept employment with a subsidiary of the Company, or vice versa or to go on leave of absence at the request, or with the approval, of the Company will not be deemed a termination of employment for the for the purpose of this paragraph.  In the event of termination of employment, Optionee may exercise the Option only to the extent vested under paragraph 2 above on the date of termination.

Termination for cause, for purposes of the Plan and this Agreement, refers to any termination resulting from:  (a) conviction of a crime that is disqualifying from employment under City National’s Criminal Convictions Policy, as set forth in the Colleague Handbook, absent an FDIC waiver; or (b) gross misconduct or willful engagement in illegal conduct; or (c) willful and continued failure to perform substantially all of the Optionee’s duties with City National (except when such failure is due to incapacity due to physical or mental illness); or (d) a conflict of interest, as set forth in the CNB Code of Conduct.

6.Limitation on Transfer.  Except as otherwise provided in subparagraph 5.4 above, or pursuant to a DRO, the Option and all rights granted under this Agreement are personal to Optionee and cannot be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to execution, attachment or similar processes.

7.Employment Relationship.  For purposes of this Agreement, Optionee shall be considered to be in the employment of the Company as long as Optionee remains an employee of either the Company, any successor corporation or a parent or subsidiary corporation (as defined in section 424 of the Internal Revenue Code) of the Company or any successor corporation.  Any question as to whether and when there has been a termination of such employment, and the cause of such termination, shall be determined by the Committee, or its delegate, as appropriate, and its determination shall be final.

Neither the Plan nor this Agreement shall constitute a contract of employment between the Company, any successor corporation or a parent or subsidiary corporation of the Company or any successor corporation and Optionee.  Each Optionee is an at-will employee except as provided in any other written agreement.  Nothing contained in the Plan (or any Award made pursuant to this Plan) or the Agreement shall confer upon Optionee any right to continue in the employment of the Company, or guarantee of payment of future incentives, or shall interfere with, affect or restrict in any way, the rights of the Company, which are expressly reserved, to discharge Optionee, any time for any reason whatsoever, with or without cause.

8.Availability of Plan/Plan Incorporated.  Optionee acknowledges that Company has made available to Optionee a copy of the Plan and agrees that this Award of Options shall be subject to all of the terms and conditions set forth in the Plan, including future amendments thereto, if any, pursuant to the terms thereof, which Plan is incorporated herein by reference as a part of this Agreement.  In the event of any conflict between the Plan and this Agreement, the provisions of the Plan will prevail.  Optionee’s rights hereunder are subject to modification or termination in certain events, as provided in the Plan, including without limitation such rules and regulations as may from time to time be adopted or promulgated in accordance with paragraph 1.3 of the Plan.  Capitalized terms not defined in this Agreement shall have the meanings set forth in the Plan.

9.Committee Powers. No provision contained in this Agreement shall in any way terminate, modify or alter, or be construed or interpreted as terminating, modifying or altering any of the powers, rights or authority vested in the Committee or, to the extent delegated, in its delegate pursuant to the terms of the Plan or resolutions adopted in furtherance of the Plan, including, without limitation, the right to make certain determinations and elections with respect to the Options. All decisions of the Committee (as established pursuant to the Plan) with respect to any questions concerning the application, administration or interpretation of the Plan will be conclusive and binding on the Company and Optionee.

10.No Rights as Shareholder.  Optionee will have no rights as shareholder with respect to Shares of Common Stock covered by this Option until the date of the issuance of a stock certificate or stock certificates.  No adjustment will be made for cash dividends for which the record date is prior to the date such stock certificate or certificates are issued.

12.Compliance with Securities Laws.  No Shares may be purchased or issued upon the exercise of this Option unless and until any then applicable requirements of the Securities and Exchange Commission, the California Commissioner of Corporations, any national securities exchange upon which the Common Stock of the Company may be listed and any other regulatory agency having jurisdiction have been fully complied with.

13.Dispute Resolution.  If a dispute arises between Optionee and Company in connection with the Stock Option award or the vesting or exercise of the Stock Options, the dispute will be resolved by binding arbitration with the American Arbitration Association (AAA) in accordance with the AAA’s Commercial Arbitration Rules then in effect.

14.Binding Effect.  This Agreement will bind and inure to the benefit of the Company and its successors and assigns, and Optionee and any heir, executor or administrator of Optionee as permitted by subparagraph 5.4.

15.Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of California.

IN WITNESS WHEREOF, the parties have executed the Agreement as of the date and year written above.

	CITY NATIONAL CORPORATION,
	a Delaware corporation
	By :###SIGNATURE###
	Christopher J. Carey,
	Executive Vice President, Chief Financial Officer
###GRANT_PRICE_REM_START###
###EMPLOYEE_NUMBER###
###GRANT_NAME###
###DICTIONARY_AWARD_NAME###
###VEST_SCHEDULE_TABLE###
###GRANT_DATE###
###GRANT_PRICE_REM_END###

EX-12

Exhibit 12

Computation of Ratio of Earnings to Fixed Charges

and Preferred Stock Dividend Requirements

(in thousands, except ratios)

	Three Months
	Ended
	March 31,			Year Ended December 31,
	2015			2014			2013			2012			2011			2010
Excluding interest on deposits (1)
Income before income taxes	$	92,716		$	394,940		$	341,980		$	321,540		$	265,871		$	172,014
Equity investee income	(4,550		)	(10,250		)	(16,650		)	(11,000		)	(12,720		)	(10,207		)
Equity investee distributions	2,627			14,468			9,698			8,234			9,428			8,084
Preferred dividends of consolidated subsidiaries	—			—			—			—			(2,885		)	(3,681		)
Fixed charges:
Interest expense (2)	9,018			40,565			44,466			41,881			36,831			52,036
Interest within rental expense	3,744			15,119			16,095			15,195			13,015			13,149
Preferred dividends of consolidated subsidiaries	—			—			—			—			2,885			3,681
Total fixed charges	12,762			55,684			60,561			57,076			52,731			68,866
Total earnings and fixed charges	$	103,555		$	454,842		$	395,589		$	375,850		$	312,425		$	235,076
Fixed charges, as above	$	12,762		$	55,684		$	60,561		$	57,076		$	52,731		$	68,866
Preferred stock dividends	7,038			28,150			16,547			—			—			3,008
Fixed charges including preferred stock dividends	$	19,800		$	83,834		$	77,108		$	57,076		$	52,731		$	71,874
Ratio of earnings to fixed charges and preferred stock dividend requirements	5.23			5.43			5.13			6.59			5.92			3.27
Including interest on deposits
Total earnings and fixed charges, as above	$	103,555		$	454,842		$	395,589		$	375,850		$	312,425		$	235,076
Add: Interest on deposits	1,920			8,271			11,114			14,042			33,685			49,030
Total earnings, fixed charges and interest on deposits	$	105,475		$	463,113		$	406,703		$	389,892		$	346,110		$	284,106
Fixed charges, including preferred stock dividends, as above	$	19,800		$	83,834		$	77,108		$	57,076		$	52,731		$	71,874
Add: Interest on deposits	1,920			8,271			11,114			14,042			33,685			49,030
Total fixed charges including preferred stock dividends and interest on deposits	$	21,720		$	92,105		$	88,222		$	71,118		$	86,416		$	120,904
Ratio of earnings to fixed charges and preferred stock dividend requirements	4.86			5.03			4.61			5.48			4.01			2.35

(1)	Certain prior period amounts have been adjusted to reflect the adoption of ASU 2014-01. See Note 1, Summary of Significant Accounting Policies, of the Notes to the Unaudited Consolidated Financial Statements for further discussion.
(2)	Includes interest expense on uncertain tax positions.

EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER SECTION 302 CERTIFICATION

I, Russell Goldsmith, certify that:

1.I have reviewed this quarterly report on Form 10-Q of City National Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

DATE: May 8, 2015	/s/ Russell Goldsmith
	RUSSELL GOLDSMITH
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER SECTION 302 CERTIFICATION

I, Christopher J. Carey, certify that:

1.I have reviewed this quarterly report on Form 10-Q of City National Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

DATE:  May 8, 2015	/s/ Christopher J. Carey
	CHRISTOPHER J. CAREY
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of City National Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Russell Goldsmith, Chief Executive Officer of the Company, and Christopher J. Carey, Chief Financial Officer of the Company, certify, pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

DATE: May 8, 2015	/s/ Russell Goldsmith
	RUSSELL GOLDSMITH
	Chief Executive Officer
DATE: May 8, 2015	/s/ Christopher J. Carey
	CHRISTOPHER J. CAREY
	Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to City National Corporation and will be retained by City National Corporation and furnished to the Securities and Exchange Commission upon request.

XML

Balance Sheet Offsetting (Tables)

3 Months Ended

Mar. 31, 2015

Balance Sheet Offsetting

Schedule of information about financial instruments that are eligible for offset

								Gross Amounts
						Net Amount		Not Offset in the
	Gross		Gross			Presented		Balance Sheet
	Amount		Amount			in the		Securities			Cash			Net
(in thousands)	Recognized		Offset			Balance Sheet		Collateral			Collateral			Amount
March 31, 2015
Financial assets:
Reverse repurchase agreements	$	700,455	$	(500,153	)	$	200,302	$	(200,000	)	$	—		$	302
Derivatives not designated as hedging instruments	15,560		(443		)	15,117		—			(1,891		)	13,226
Total financial assets	$	716,015	$	(500,596	)	$	215,419	$	(200,000	)	$	(1,891	)	$	13,528
Financial liabilities:
Repurchase agreements	$	500,153	$	(500,153	)	$	—	$	—		$	—		$	—
Derivatives not designated as hedging instruments	76,669		(443		)	76,226		(21,068		)	(41,638		)	13,520
Total financial liabilities	$	576,822	$	(500,596	)	$	76,226	$	(21,068	)	$	(41,638	)	$	13,520
December 31, 2014
Financial assets:
Reverse repurchase agreements	$	700,149	$	(500,041	)	$	200,108	$	(200,000	)	$	—		$	108
Derivatives not designated as hedging instruments	7,669		(1,562		)	6,107		—			—			6,107
Total financial assets	$	707,818	$	(501,603	)	$	206,215	$	(200,000	)	$	—		$	6,215
Financial liabilities:
Repurchase agreements	$	500,041	$	(500,041	)	$	—	$	—		$	—		$	—
Derivatives not designated as hedging instruments	51,125		(1,562		)	49,563		(14,654		)	(28,046		)	6,863
Total financial liabilities	$	551,166	$	(501,603	)	$	49,563	$	(14,654	)	$	(28,046	)	$	6,863

XML

Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail 2) (Credit Risk)	3 Months Ended
	Mar. 31, 2015
Covered loans
Concentrations of credit risk
Number of states with largest concentration by loan type	5
Total loans outstanding | Noncovered loans | California
Concentrations of credit risk
Percent of total loans outstanding (as a percent)	73.00%
Total loans outstanding | Noncovered loans | New York
Concentrations of credit risk
Percent of total loans outstanding (as a percent)	9.00%
Total loans outstanding | Noncovered loans | Other states and countries
Concentrations of credit risk
Percent of total loans outstanding (as a percent)	18.00%
Total loans outstanding | Covered loans | California
Concentrations of credit risk
Percent of total loans outstanding (as a percent)	32.00%
Total loans outstanding | Covered loans | Texas
Concentrations of credit risk
Percent of total loans outstanding (as a percent)	12.00%
Total loans outstanding | Covered loans | Nevada
Concentrations of credit risk
Percent of total loans outstanding (as a percent)	6.00%
Total loans outstanding | Covered loans | Ohio
Concentrations of credit risk
Percent of total loans outstanding (as a percent)	6.00%
Total loans outstanding | Covered loans | Arizona
Concentrations of credit risk
Percent of total loans outstanding (as a percent)	6.00%
Total loans outstanding | Covered loans | Other states
Concentrations of credit risk
Percent of total loans outstanding (as a percent)	38.00%

XML

Securities (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Realized gains and losses
Gross realized gains	$ 3,392,000	$ 2,602,000
Gross realized losses	(16,000)	(480,000)
Net realized gains	3,376,000	2,122,000
Securities available-for-sale:
Amortized Cost	5,201,001,000		5,894,509,000
Gross Unrealized Gains	33,649,000		32,788,000
Gross Unrealized Losses	(24,262,000)		(44,314,000)
Fair Value	5,210,388,000		5,882,983,000
Securities held-to-maturity:
Held-to-maturity Securities, Amortized Cost	3,413,806,000		3,427,031,000
Gross Unrealized Gains	101,945,000		72,659,000
Gross Unrealized Losses	(5,198,000)		(15,043,000)
Fair Value	3,510,553,000		3,484,647,000
Sales of securities available-for-sale	398,166,000	377,115,000
Sales of securities held-to-maturity	0	0
Interest and dividend income on securities (including trading securities)
Taxable interest income	35,000,000	36,000,000
Nontaxable interest income	7,000,000	5,500,000
Dividend income	11,000	9,000
Total securities	8,730,000,000		9,480,000,000
Total debt securities
Securities available-for-sale:
Amortized Cost	5,199,660,000		5,893,001,000
Gross Unrealized Gains	33,430,000		30,800,000
Gross Unrealized Losses	(23,852,000)		(43,964,000)
Fair Value	5,209,238,000		5,879,837,000
Securities held-to-maturity:
Held-to-maturity Securities, Amortized Cost	3,413,806,000
U.S. Treasury
Securities available-for-sale:
Amortized Cost	115,893,000		116,919,000
Gross Unrealized Gains	29,000		17,000
Gross Unrealized Losses	(15,000)		(10,000)
Fair Value	115,907,000		116,926,000
Federal agency - Debt
Securities available-for-sale:
Amortized Cost	1,219,481,000		1,401,303,000
Gross Unrealized Gains	1,168,000		558,000
Gross Unrealized Losses	(429,000)		(3,280,000)
Fair Value	1,220,220,000		1,398,581,000
Securities held-to-maturity:
Held-to-maturity Securities, Amortized Cost	286,581,000		292,932,000
Gross Unrealized Gains	9,923,000		6,430,000
Gross Unrealized Losses	(72,000)		(255,000)
Fair Value	296,432,000		299,107,000
Federal agency - MBS
Securities available-for-sale:
Amortized Cost	99,891,000		102,939,000
Gross Unrealized Gains	2,498,000		2,601,000
Gross Unrealized Losses	(874,000)		(1,014,000)
Fair Value	101,515,000		104,526,000
Securities held-to-maturity:
Held-to-maturity Securities, Amortized Cost	556,931,000		553,589,000
Gross Unrealized Gains	20,346,000		13,427,000
Gross Unrealized Losses	(567,000)		(2,275,000)
Fair Value	576,710,000		564,741,000
CMOs - Federal agency
Securities available-for-sale:
Amortized Cost	3,204,823,000		3,599,831,000
Gross Unrealized Gains	22,016,000		19,628,000
Gross Unrealized Losses	(21,953,000)		(38,869,000)
Fair Value	3,204,886,000		3,580,590,000
Securities held-to-maturity:
Held-to-maturity Securities, Amortized Cost	1,766,325,000		1,811,574,000
Gross Unrealized Gains	48,270,000		29,998,000
Gross Unrealized Losses	(2,749,000)		(10,292,000)
Fair Value	1,811,846,000		1,831,280,000
CMOs - Non-agency
Securities available-for-sale:
Amortized Cost	23,147,000		24,385,000
Gross Unrealized Gains	24,000		40,000
Gross Unrealized Losses	(360,000)		(411,000)
Fair Value	22,811,000		24,014,000
State and municipal
Securities available-for-sale:
Amortized Cost	421,419,000		473,272,000
Gross Unrealized Gains	6,257,000		6,139,000
Gross Unrealized Losses	(218,000)		(380,000)
Fair Value	427,458,000		479,031,000
Securities held-to-maturity:
Held-to-maturity Securities, Amortized Cost	717,937,000		682,705,000
Gross Unrealized Gains	23,084,000		22,732,000
Gross Unrealized Losses	(1,810,000)		(1,997,000)
Fair Value	739,211,000		703,440,000
Other debt securities
Securities available-for-sale:
Amortized Cost	115,006,000		174,352,000
Gross Unrealized Gains	1,438,000		1,817,000
Gross Unrealized Losses	(3,000)
Fair Value	116,441,000		176,169,000
Securities held-to-maturity:
Held-to-maturity Securities, Amortized Cost	86,032,000		86,231,000
Gross Unrealized Gains	322,000		72,000
Gross Unrealized Losses			(224,000)
Fair Value	86,354,000		86,079,000
Equity securities and mutual funds
Securities available-for-sale:
Amortized Cost	1,341,000		1,508,000
Gross Unrealized Gains	219,000		1,988,000
Gross Unrealized Losses	(410,000)		(350,000)
Fair Value	$ 1,150,000		$ 3,146,000

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Derivative Instruments (Detail 2) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Foreign Exchange Contracts
Credit Risk Exposure and Collateral
Cash collateral received	$ 1,900,000
Cash collateral delivered	2,100,000
Derivatives not designated as hedging instruments
Derivative instruments gain (loss)
Derivative Instruments, Gain (Loss) Recognized in Income, Net	6,700,000	6,800,000
Derivatives not designated as hedging instruments | Interest-Rate Contracts | Other noninterest income
Derivative instruments gain (loss)
Derivative Instruments, Gain (Loss) Recognized in Income, Net	(700,000)	(500,000)
Derivatives not designated as hedging instruments | Option contracts. | Other noninterest income
Derivative instruments gain (loss)
Derivative Instruments, Gain (Loss) Recognized in Income, Net	(100,000)	100,000
Derivatives not designated as hedging instruments | Foreign Exchange Contracts | International services income
Derivative instruments gain (loss)
Derivative Instruments, Gain (Loss) Recognized in Income, Net	7,500,000	7,200,000
Derivatives designated and not designated as hedging instruments
Credit Risk Exposure and Collateral
Aggregate fair value of derivatives with credit-risk-related contingent features, net liability position	23,700,000
Collateral delivered on swap agreements in the form of securities, with credit-risk-related contingent features	14,500,000
Collateral delivered on swap agreements in the form of cash, with credit-risk-related contingent features	41,400,000
Derivatives designated and not designated as hedging instruments | Interest-Rate Swaps
Credit Risk Exposure and Collateral
Interest-rate swap credit risk exposure	0		0
Collateral received from swap counterparties	0		0
Collateral delivered on swap agreements, without credit-risk contingent features	$ 6,600,000

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Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Changes in Accretable Yield for Acquired Impaired Loans
Balance at the beginning of the period	$ 168,469	$ 219,018
Accretion	(9,876)	(12,528)
Reclassification from nonaccretable difference	4,816	4,305
Disposals and other	(8,853)	(8,704)
Balance at the end of the period	$ 154,556	$ 202,091
Charge off of consumer loans, delinquency period for overdrafts, low end of range	60 days
Charge off of consumer loans, delinquency period for secured consumer loans	180 days

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Fair Value Measurements (Detail 4) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Rochdale Investment Management, LLC
Total realized/unrealized gains (losses):
Contingent consideration paid to shareholders			$ 17,400,000
Contingent Consideration Liability
Level 3 Liabilities Measured on a Recurring Basis
Balance, beginning of period	(34,983,000)	(49,900,000)
Total realized/unrealized gains (losses):
Settlements		16,250,000
Other	(418,000)	(411,000)
Balance, end of period	(35,401,000)	(34,061,000)
Contingent Consideration Liability | Rochdale Investment Management, LLC
Total realized/unrealized gains (losses):
Business Acquisition Period of Additional Cash Consideration Payment	6 years
Low-end of the potential range of estimate of total consideration payment	30,000,000
High-end of the potential range of estimate of total consideration payment	53,000,000
FDIC Clawback Liability
Level 3 Liabilities Measured on a Recurring Basis
Balance, beginning of period	(15,106,000)	(11,967,000)
Total realized/unrealized gains (losses):
Included in earnings	(857,000)	(964,000)
Balance, end of period	$ (15,963,000)	$ (12,931,000)

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Other Real Estate Owned (Tables)

3 Months Ended

Mar. 31, 2015

Other Real Estate Owned.

Summary of OREO activity

	For the three months ended March 31, 2015									For the three months ended March 31, 2014
(in thousands)	Non-Covered OREO			Covered OREO			Total			Non-Covered OREO			Covered OREO			Total
Balance, beginning of period	$	10,736		$	12,760		$	23,496		$	12,611		$	25,481		$	38,092
Additions	—			1,085			1,085			—			2,033			2,033
Sales	(4,779		)	(631		)	(5,410		)	(3,186		)	(2,504		)	(5,690		)
Valuation adjustments	—			(1,662		)	(1,662		)	(13		)	(155		)	(168		)
Balance, end of period	$	5,957		$	11,552		$	17,509		$	9,412		$	24,855		$	34,267

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Employee Benefit Plans (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Employee Benefit Plans
Maximum contribution by employee (as a percent)	50.00%
Percentage of employer contribution of first 6 percent of covered compensation	50.00%
Maximum employee contribution matched by employer as a percentage of covered compensation	6.00%
Profit sharing and matching contribution expense	$ 6.0	$ 5.3
Percentage of incentive compensation	100.00%
Net deferred compensation expense	$ (0.1)	$ 0.1

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Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail 5) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Recorded Investment
With no related allowance recorded	$ 36,921	$ 77,958	$ 45,611
With an allowance recorded	15,127	22,788	15,611
Total impaired loans	52,048	100,746	61,222
Unpaid Contractual Principal Balance
With no related allowance recorded	41,541	98,320	51,987
With an allowance recorded	20,726	25,397	18,352
Total impaired loans	62,267	123,717	70,339
Related Allowance
Total impaired loans	784	2,857	728
Average Recorded Investment
With no related allowance recorded	41,266	78,714
With an allowance recorded	15,369	21,991
Total impaired loans	56,635	100,705
Interest Income Recognized
With no related allowance recorded	285	688
With an allowance recorded	114	44
Total impaired loans	399	732
Commercial
Recorded Investment
With no related allowance recorded	1,449	11,257	8,894
With an allowance recorded	6,151	17,426	6,470
Total impaired loans	7,600	28,683	15,364
Unpaid Contractual Principal Balance
With no related allowance recorded	1,637	11,920	9,182
With an allowance recorded	11,425	19,663	8,878
Total impaired loans	13,062	31,583	18,060
Related Allowance
Total impaired loans	471	2,557	399
Average Recorded Investment
With no related allowance recorded	5,172	14,489
With an allowance recorded	6,310	15,781
Total impaired loans	11,482	30,270
Interest Income Recognized
With no related allowance recorded	5	137
With an allowance recorded	17
Total impaired loans	22	137
Commercial real estate mortgages
Recorded Investment
With no related allowance recorded	17,838	36,562	19,858
With an allowance recorded	5,041	5,362	5,184
Total impaired loans	22,879	41,924	25,042
Unpaid Contractual Principal Balance
With no related allowance recorded	18,762	39,660	22,416
With an allowance recorded	5,375	5,734	5,526
Total impaired loans	24,137	45,394	27,942
Related Allowance
Total impaired loans	273	300	281
Average Recorded Investment
With no related allowance recorded	18,848	34,666
With an allowance recorded	5,113	5,373
Total impaired loans	23,961	40,039
Interest Income Recognized
With no related allowance recorded	208	438
With an allowance recorded	71	44
Total impaired loans	279	482
Residential mortgages
Recorded Investment
With no related allowance recorded	7,720	7,904	7,980
With an allowance recorded	3,935		3,957
Total impaired loans	11,655	7,904	11,937
Unpaid Contractual Principal Balance
With no related allowance recorded	7,980	8,669	8,256
With an allowance recorded	3,926		3,948
Total impaired loans	11,906	8,669	12,204
Related Allowance
Total impaired loans	40		48
Average Recorded Investment
With no related allowance recorded	7,850	7,721
With an allowance recorded	3,946	837
Total impaired loans	11,796	8,558
Interest Income Recognized
With no related allowance recorded	10	24
With an allowance recorded	26
Total impaired loans	36	24
Fixed
Recorded Investment
With no related allowance recorded	7,720	4,888	7,756
Unpaid Contractual Principal Balance
With no related allowance recorded	7,980	5,051	7,994
Average Recorded Investment
With no related allowance recorded	7,738	3,512
Interest Income Recognized
With no related allowance recorded	10	10
Variable
Recorded Investment
With no related allowance recorded		3,016	224
With an allowance recorded	3,935		3,957
Unpaid Contractual Principal Balance
With no related allowance recorded		3,618	262
With an allowance recorded	3,926		3,948
Related Allowance
Total impaired loans	40		48
Average Recorded Investment
With no related allowance recorded	112	4,209
With an allowance recorded	3,946	837
Interest Income Recognized
With no related allowance recorded		14
With an allowance recorded	26
Real estate construction
Recorded Investment
With no related allowance recorded	8,979	18,788	6,609
Total impaired loans	8,979	18,788	6,609
Unpaid Contractual Principal Balance
With no related allowance recorded	11,119	33,566	8,758
Total impaired loans	11,119	33,566	8,758
Average Recorded Investment
With no related allowance recorded	7,794	18,942
Total impaired loans	7,794	18,942
Interest Income Recognized
With no related allowance recorded	62	89
Total impaired loans	62	89
Construction
Recorded Investment
With no related allowance recorded		5,484
Unpaid Contractual Principal Balance
With no related allowance recorded		6,766
Average Recorded Investment
With no related allowance recorded		5,484
Interest Income Recognized
With no related allowance recorded		55
Land.
Recorded Investment
With no related allowance recorded	8,979	13,304	6,609
Unpaid Contractual Principal Balance
With no related allowance recorded	11,119	26,800	8,758
Average Recorded Investment
With no related allowance recorded	7,794	13,458
Interest Income Recognized
With no related allowance recorded	62	34
Home equity loans and lines of credit
Recorded Investment
With no related allowance recorded	935	3,447	2,270
Total impaired loans	935	3,447	2,270
Unpaid Contractual Principal Balance
With no related allowance recorded	2,043	4,505	3,375
Total impaired loans	2,043	4,505	3,375
Average Recorded Investment
With no related allowance recorded	1,602	2,888
Total impaired loans	1,602	2,888
Installment
Average Recorded Investment
With no related allowance recorded		8
Total impaired loans		8
Consumer Installment loan
Average Recorded Investment
With no related allowance recorded		$ 8

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Noncontrolling Interest (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 item	Mar. 31, 2014
Redeemable Noncontrolling Interest
Number of firms in which entity holds majority ownership interest	4
Fair value of noncontrolling owners equity interests	$ 37,326
Redeemable noncontrolling interest
Balance, beginning of period	39,978
Net income	553	699
Balance, end of period	37,326
Redeemable Noncontrolling Interest
Redeemable Noncontrolling Interest
Number of firms in which entity holds majority ownership interest	4
Fair value of noncontrolling owners equity interests	37,326	45,641
Redeemable noncontrolling interest
Balance, beginning of period	39,978	39,768
Net income	553	699
Distributions to redeemable noncontrolling interest	(816)	(347)
Additions and redemptions, net	(2,662)	92
Adjustments to fair value	273	5,429
Balance, end of period	$ 37,326	$ 45,641

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Segment Results (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 item	Mar. 31, 2014
Segment Results
Number of reportable segments	3
Earnings Summary:
Net interest income	$ 216,580	$ 199,798
Provision for losses on covered loans	497	4,655
Noninterest income	111,075	101,248
Depreciation and amortization	16,359	9,315
Noninterest expense	218,083	201,537
Income before income taxes	92,716	85,539
Provision for income taxes	30,597	31,010
Net income	62,119	54,529
Less: Net income attributable to noncontrolling interest	553	699
Net income attributable to City National Corporation	61,566	53,830
Selected Average Balances:
Loans and leases, excluding covered loans	20,404,720	17,338,419
Covered loans	492,438	696,163
Total assets	32,259,619	29,413,998
Deposits	27,808,383	25,371,598
Goodwill	635,868	642,622
Customer-relationship intangibles, net	34,184	40,055
Other segment
Earnings Summary:
Net interest income	7,947	9,765
Noninterest income	(15,510)	(9,460)
Depreciation and amortization	11,783	4,747
Noninterest expense	(26,402)	(18,372)
Income before income taxes	7,056	13,930
Provision for income taxes	2,342	5,091
Net income	4,714	8,839
Net income attributable to City National Corporation	4,714	8,839
Selected Average Balances:
Loans and leases, excluding covered loans	56,617	55,009
Total assets	10,554,163	10,516,708
Deposits	170,668	232,082
Commercial and Private Banking
Earnings Summary:
Net interest income	207,826	189,708
Provision for losses on covered loans	497	4,655
Noninterest income	51,496	47,142
Depreciation and amortization	2,715	2,821
Noninterest expense	189,882	167,695
Income before income taxes	66,228	61,679
Provision for income taxes	21,987	22,544
Net income	44,241	39,135
Net income attributable to City National Corporation	44,241	39,135
Selected Average Balances:
Loans and leases, excluding covered loans	20,348,103	17,283,410
Covered loans	492,438	696,163
Total assets	20,960,198	18,239,567
Deposits	27,549,867	25,051,747
Goodwill	393,177	393,177
Customer-relationship intangibles, net	1,650	3,134
Wealth Management
Earnings Summary:
Net interest income	807	325
Noninterest income	75,089	63,566
Depreciation and amortization	1,861	1,747
Noninterest expense	54,603	52,214
Income before income taxes	19,432	9,930
Provision for income taxes	6,268	3,375
Net income	13,164	6,555
Less: Net income attributable to noncontrolling interest	553	699
Net income attributable to City National Corporation	12,611	5,856
Selected Average Balances:
Total assets	745,258	657,723
Deposits	87,848	87,769
Goodwill	242,691	249,445
Customer-relationship intangibles, net	$ 32,534	$ 36,921

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Balance Sheet Offsetting (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Reverse repurchase agreements
Gross Amount Recognized	$ 700,455,000	$ 700,149,000
Gross amount Offset	(500,153,000)	(500,041,000)
Net Amount Presented in the Balance Sheet	200,302,000	200,108,000
Gross Amounts Not Offset in the Balance Sheet, Securities Collateral	(200,000,000)	(200,000,000)
Net Amount	302,000	108,000
Repurchase agreements
Gross Amount Recognized	500,153,000	500,041,000
Gross Amount Offset	(500,153,000)	(500,041,000)
Derivatives not designated as hedging instruments | Swap
Financial instruments that are eligible for offset
Principal amount of collateral swap agreement	500,000,000
Financial assets
Fair Value of Securities Pledged as Collateral	540,700,000
Financial liabilities
Fair Value of Securities Received as Collateral	528,000,000
Derivatives not designated as hedging instruments | Master netting arrangements and similar agreements
Financial assets
Gross Amount Recognized	15,560,000	7,669,000
Gross Amount Offset	(443,000)	(1,562,000)
Net Amount Presented in the Balance Sheet	15,117,000	6,107,000
Gross Amounts Not Offset in the Balance Sheet, Cash Collateral	(1,891,000)
Net Amount	13,226,000	6,107,000
Financial liabilities
Gross Amount Recognized	76,669,000	51,125,000
Gross Amount Offset	(443,000)	(1,562,000)
Net Amount Presented in the Balance Sheet	76,226,000	49,563,000
Gross Amounts Not Offset in the Balance Sheet, Securities Collateral	(21,068,000)	(14,654,000)
Gross Amounts Not Offset in the Balance Sheet, Cash Collateral	(41,638,000)	(28,046,000)
Net Amount	13,520,000	6,863,000
Derivatives designated and not designated as hedging instruments | Master netting arrangements and similar agreements
Financial assets
Gross Amount Recognized	716,015,000	707,818,000
Gross Amount Offset	(500,596,000)	(501,603,000)
Net Amount Presented in the Balance Sheet	215,419,000	206,215,000
Gross Amounts Not Offset in the Balance Sheet, Securities Collateral	(200,000,000)	(200,000,000)
Gross Amount Not Offset in the Balance Sheet, Cash Collateral	(1,891,000)
Net Amount	13,528,000	6,215,000
Financial Liabilities
Gross Amount Recognized	576,822,000	551,166,000
Gross Amount Offset	(500,596,000)	(501,603,000)
Net Amount Presented in the Balance Sheet	76,226,000	49,563,000
Gross Amounts Not Offset in the Balance Sheet, Securities Collateral	(21,068,000)	(14,654,000)
Gross Amounts Not Offset in the Balance Sheet, Cash Collateral	(41,638,000)	(28,046,000)
Net Amount	$ 13,520,000	$ 6,863,000

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Noncontrolling Interest

3 Months Ended

Mar. 31, 2015

Noncontrolling Interest

Noncontrolling Interest

Note 17. Noncontrolling Interest

In accordance with ASC Topic 810, Consolidation, and EITF Topic D-98, Classification and Measurement of Redeemable Securities (“Topic D-98”), the Company reports noncontrolling interest in its majority-owned affiliates as Redeemable noncontrolling interest in the mezzanine section between liabilities and equity in the consolidated financial statements. Topic D-98 specifies that securities that are redeemable at the option of the holder or outside the control of the issuer are not considered permanent equity and should be classified in the mezzanine section.

The Corporation holds a majority ownership interest in four investment management and wealth advisory affiliates that it consolidates. In general, the management of each majority-owned affiliate has a significant noncontrolling ownership position in its firm and supervises the day-to-day operations of the affiliate. The Corporation is in regular contact with each affiliate regarding its operations and is an active participant in the management of the affiliates through its position on each firm’s board.

The Corporation’s investment in each affiliate is governed by operating agreements and other arrangements which provide the Corporation certain rights, benefits and obligations. The Corporation determines the appropriate method of accounting based upon these agreements and the factors contained therein. All majority-owned affiliates that have met the criteria for consolidation are included in the consolidated financial statements. All material intercompany balances and transactions are eliminated. The Company applies the equity method of accounting for certain investments where it holds a noncontrolling interest. For equity method investments, the Company’s portion of income before taxes is included in Trust and investment fees in the consolidated statements of income.

As of March 31, 2015, affiliate noncontrolling owners held equity interests with an estimated fair value of $37.3 million. This estimate reflects the maximum obligation to purchase equity interests in the affiliates. The events which would require the Company to purchase the equity interests may occur in the near term or over a longer period of time. The terms of the put provisions vary by agreement, but the value of the put is at the approximate fair value of the interests. The parent company carries key man life insurance policies to fund a portion of these conditional purchase obligations in the event of the death of certain key holders.

The following is a summary of activity for redeemable noncontrolling interest for the three months ended March 31, 2015 and 2014:

	For the three months ended March 31,
(in thousands)	2015			2014
Balance, beginning of period	$	39,978		$	39,768
Net income	553			699
Distributions to redeemable noncontrolling interest	(816		)	(347		)
Additions and redemptions, net	(2,662		)	92
Adjustments to fair value	273			5,429
Balance, end of period	$	37,326		$	45,641

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Securities (Detail 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2013
Available-for-sale securities
Impairment losses recognized in earnings on other-than-temporarily impaired securities	$ 65	$ 0
Other than Temporary Impairment Losses, Investments, Portion in Other Comprehensive Loss, Net of Tax, Including Portion Attributable to Noncontrolling Interest, Available-for-sale Securities	133	0
Impairment losses recognized in earnings income for securities held- to-maturity	0	0
Total debt securities
Changes in cumulative credit related other-than-temporary impairment recognized in earnings
Balance, beginning of period	2,470		4,549
Subsequent credit-related impairment	65
Balance, end of period	$ 2,535	$ 4,549	$ 4,549

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Summary of Significant Accounting Policies (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 item	Mar. 31, 2014	Dec. 31, 2014
Summary of Significant Accounting Policies
Number of offices for delivery of banking, investment and trust services	75
Number of investment advisory affiliates	4
Number of unconsolidated subsidiary	1
Assets
Deferred tax asset	$ 228,273		$ 233,811
Affordable Housing Investments	190,347		186,423
Other Assets	579,189		537,847
Shareholders' equity
Retained earnings	2,109,157		2,071,230
Noninterest Expense
Other operating	8,853	8,805
Income taxes	30,597	31,010
Net income	62,119	54,529
Net income per common share, basic (in dollars per share)	$ 1.03	$ 0.90
Net income per common share, diluted (in dollars per share)	$ 1.01	$ 0.89
Cash Flows From Operating Activities
Net income	62,119	54,529
Adjustments to net income:
Deferred income tax benefit	(3,211)	(3,237)
Other, net	9,583	4,948
Net change in:
Other assets and other liabilities, net	(92,959)	(88,563)
As Reported
Assets
Deferred tax asset			230,376
Affordable Housing Investments			203,010
Other Assets			537,826
Shareholders' equity
Retained earnings			2,084,361
Noninterest Expense
Other operating		12,846
Income taxes		26,288
Net income		55,210
Net income per common share, basic (in dollars per share)		$ 0.91
Net income per common share, diluted (in dollars per share)		$ 0.90
Cash Flows From Operating Activities
Net income		55,210
Adjustments to net income:
Deferred income tax benefit		(2,679)
Other, net		3,720
Net change in:
Other assets and other liabilities, net		(88,574)
As Adjusted
Assets
Deferred tax asset			233,811
Affordable Housing Investments			186,423
Other Assets			537,847
Shareholders' equity
Retained earnings			2,071,230
Noninterest Expense
Other operating		8,805
Income taxes		31,010
Net income		54,529
Net income per common share, basic (in dollars per share)		$ 0.90
Net income per common share, diluted (in dollars per share)		$ 0.89
Cash Flows From Operating Activities
Net income		54,529
Adjustments to net income:
Deferred income tax benefit		(3,237)
Other, net		4,948
Net change in:
Other assets and other liabilities, net		$ (88,563)

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Variable Interest Entities (Detail) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Variable Interest Entities
Affordable housing investments	$ 190,347,000	$ 186,423,000
Affordable Housing VIEs - not primary beneficiary
Variable Interest Entities
Affordable housing investments	190,300,000	186,400,000
Unfunded commitments for affordable housing investments	67,800,000
Aggregate carrying value of private equity and alternative investment funds	$ 29,200,000	$ 29,200,000

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2015

Share-Based Compensation

Summary of assumptions to estimate the fair value of stock option awards

	For the three months ended March 31,
	2015		2014
Weighted-average volatility	26.66	%	27.35	%
Dividend yield	1.55	%	1.79	%
Expected term (in years)	6.06		6.07
Risk-free interest rate	1.78	%	1.99	%

Summary of options activity and related information under the Plan

			Weighted				Weighted
			Average		Aggregate		Average
	Number of		Exercise		Intrinsic		Remaining
	Shares		Price		Value		Contractual
Options	(in thousands)		(per share)		(in thousands) (1)		Term
Outstanding at January 1, 2015	3,971		$	57.40
Granted	374		90.46
Exercised	(332	)	64.25
Forfeited or expired	(10	)	66.36
Outstanding at March 31, 2015	4,003		$	59.90	$	117,325	5.77
Exercisable at March 31, 2015	2,850		$	55.34	$	96,155	4.58

(1) Includes in-the-money options only.

Summary of changes in unvested options and related information under the Plan

			Weighted Average
	Number of		Grant Date
	Shares		Fair Value
Unvested Options	(in thousands)		(per share)
Unvested at January 1, 2015	1,269		$	14.80
Granted	374		21.80
Vested	(488	)	14.82
Forfeited	(2	)	13.17
Unvested at March 31, 2015	1,153		$	17.07

Share-based compensation

Summary of changes in restricted stock and related information under the Plan

			Weighted Average
	Number of		Grant Date
	Shares		Fair Value
Restricted Stock (1)	(in thousands)		(per share)
Unvested at January 1, 2015	525		$	60.60
Granted	99		90.46
Vested	(130	)	54.97
Forfeited	(1	)	58.22
Unvested at March 31, 2015	493		$	68.09

(1) Includes restricted stock units.

Cash-settled restricted stock units

Share-based compensation

Summary of changes in restricted stock and related information under the Plan

	Number of
	Shares
Cash-Settled Restricted Stock Units	(in thousands)
Unvested at January 1, 2015	174
Granted	14
Vested	(43	)
Forfeited	(1	)
Unvested at March 31, 2015	144

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Other Investments (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
FHLB and FRB Stock
Investment in FRB and FHLB stock	$ 58,400,000		$ 58,400,000
Private Equity and Alternative Investments
Investments carried at cost	29,188,000		29,212,000
Recognized impairment losses on cost method investments	400,000	0
Alternative Investments Measured at Fair Value on a Nonrecurring Basis
Fair Value	1,078,000
Unfunded Commitments	179,000
Private equity and alternative investments
Private Equity and Alternative Investments
Investments carried at cost	18,095,000		18,605,000
Alternative Investments Measured at Fair Value on a Nonrecurring Basis
Fair Value	328,000
Unfunded Commitments	179,000
Real estate
Private Equity and Alternative Investments
Investments carried at cost	7,320,000		7,081,000
Hedge
Private Equity and Alternative Investments
Investments carried at cost	1,168,000		1,668,000
Other
Private Equity and Alternative Investments
Investments carried at cost	2,605,000		1,858,000
Alternative Investments Measured at Fair Value on a Nonrecurring Basis
Fair Value	$ 750,000

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Share-Based Compensation (Detail 2) (Stock options, USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Stock options
Summary of option activity and related information
Number of Options Outstanding, beginning of the period (in shares)	3,971,000
Number of options granted (in shares)	374,000
Number of options exercised (in shares)	(332,000)
Number of options forfeited or expired (in shares)	(10,000)
Number of Options Outstanding, end of the period (in shares)	4,003,000
Weighted-Average Exercise Price of Options Outstanding, beginning of the period (in dollars per share)	$ 57.40
Weighted-Average Exercise Price of Options Granted (in dollars per share)	$ 90.46
Weighted-Average Exercise Price of Options Exercised (in dollars per share)	$ 64.25
Weighted-Average Exercise Price of Options Forfeited or expired (in dollars per share)	$ 66.36
Weighted-Average Exercise Price of Options Outstanding, end of the period (in dollars per share)	$ 59.90
Outstanding Aggregate Intrinsic Value of in-the-money Options	$ 117,325,000
Weighted-Average Remaining Contractual Term Outstanding	5 years 9 months 7 days
Number of Options Exercisable (in shares)	2,850,000
Weighted-Average Exercise Price of options exercisable (in dollars per share)	$ 55.34
Aggregate Intrinsic Value of in-the-money Options Exercisable	96,155,000
Weighted-Average Remaining Contractual Term Exercisable	4 years 6 months 29 days
Share-based Compensation Arrangement by Share-based Payment Award, Options Unvested and related information
Unvested at the beginning of the period (in shares)	1,269,000
Granted (in shares)	374,000
Vested (in shares)	(487,678)	(517,130)
Forfeited (in shares)	(2,000)
Unvested at the end of the period (in shares)	1,153,000
Unvested at the beginning of the period (in dollars per share)	$ 14.80
Granted (in dollars per share)	$ 21.80	$ 17.94
Vested (in dollars per share)	$ 14.82
Forfeited (in dollars per share)	$ 13.17
Unvested at the end of the period (in dollars per share)	$ 17.07
Total fair value of options vested	7,200,000	7,500,000
Unrecognized compensation cost related to unvested stock options granted	$ 16,500,000
Period of recognition for unrecognized compensation cost related to unvested stock options granted	3 years

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Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail 9) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	$ 20,910,355,000	$ 17,751,385,000	$ 20,337,206,000
Covered Loans Allowance
Balance, beginning of period	8,608,000	15,922,000
Provision for losses	497,000	4,655,000
Change in allowance due to loan removals	647,000	(2,138,000)
Balance, end of period	9,752,000	18,439,000
Covered loans
Covered Loans Allowance
Loans on nonaccrual status	0		0
Covered loans 30 to 89 days delinquent	12,500,000		7,400,000
Loans 90 days or more past due on accrual status	22,100,000		28,300,000
Commercial
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	9,455,621,000		9,360,976,000
Commercial real estate mortgages
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	3,737,137,000	3,280,868,000	3,539,703,000
Residential mortgages
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	5,299,947,000	4,682,055,000	5,106,803,000
Fixed
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	1,478,120,000		1,401,952,000
Variable
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	3,821,827,000		3,704,851,000
Real estate construction
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	794,274,000	389,188,000	710,224,000
Construction
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	766,840,000		686,990,000
Land.
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	27,434,000		23,234,000
Home equity loans and lines of credit
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	791,731,000	691,338,000	785,796,000
Installment
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	186,076,000	150,895,000	184,613,000
Commercial Installment loan
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	249,000		298,000
Consumer Installment loan
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	185,827,000		184,315,000
Lease financing
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	645,569,000		649,091,000
Nonclassified
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	20,701,520,000		20,146,374,000
Nonclassified | Commercial
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	9,383,150,000		9,304,636,000
Nonclassified | Commercial real estate mortgages
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	3,697,901,000		3,511,229,000
Nonclassified | Residential mortgages
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	5,248,474,000		5,050,898,000
Nonclassified | Fixed
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	1,456,060,000		1,375,175,000
Nonclassified | Variable
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	3,792,414,000		3,675,723,000
Nonclassified | Real estate construction
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	781,491,000		696,380,000
Nonclassified | Construction
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	763,016,000		679,744,000
Nonclassified | Land.
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	18,475,000		16,636,000
Nonclassified | Home equity loans and lines of credit
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	763,760,000		754,694,000
Nonclassified | Installment
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	185,401,000		183,488,000
Nonclassified | Commercial Installment loan
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	249,000		298,000
Nonclassified | Consumer Installment loan
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	185,152,000		183,190,000
Nonclassified | Lease financing
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	641,343,000		645,049,000
Classified
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	208,835,000		190,832,000
Classified | Commercial
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	72,471,000		56,340,000
Classified | Commercial real estate mortgages
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	39,236,000		28,474,000
Classified | Residential mortgages
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	51,473,000		55,905,000
Classified | Fixed
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	22,060,000		26,777,000
Classified | Variable
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	29,413,000		29,128,000
Classified | Real estate construction
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	12,783,000		13,844,000
Classified | Construction
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	3,824,000		7,246,000
Classified | Land.
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	8,959,000		6,598,000
Classified | Home equity loans and lines of credit
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	27,971,000		31,102,000
Classified | Installment
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	675,000		1,125,000
Classified | Consumer Installment loan
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	675,000		1,125,000
Classified | Lease financing
Financing Receivable, Recorded Investment
Loans and leases, excluding covered loans	$ 4,226,000		$ 4,042,000

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Fair Value Measurements (Detail 5) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Financial Assets:
Cash and due from banks	$ 433,670,000	$ 336,470,000
Due from banks - interest-bearing	334,014,000	119,981,000
Securities purchased under resale agreements	200,302,000	200,108,000
Securities held-to-maturity	3,510,553,000	3,484,647,000
Loans and leases, net of allowance	20,601,497,000	20,027,057,000
Covered loans, net of allowance	470,484,000	502,371,000
FDIC indemnification asset	43,256,000	50,511,000
Investment in FHLB and FRB stock	58,400,000	58,400,000
Quoted Prices in Active Markets Level 1
Financial Assets:
Cash and due from banks	433,700,000	336,500,000
Due from banks - interest-bearing	334,000,000	120,000,000
Financial Liabilities:
Short-term borrowings		320,000,000
Significant Other Observable Inputs Level 2
Financial Assets:
Securities purchased under resale agreements	202,100,000	201,100,000
Securities held-to-maturity	3,510,600,000	3,484,600,000
Investment in FHLB and FRB stock	58,400,000	58,400,000
Financial Liabilities:
Deposits	27,849,000,000	27,435,100,000
Long-term debt	617,600,000	605,300,000
Significant Unobservable Inputs Level 3
Financial Assets:
Loans and leases, net of allowance	21,153,400,000	20,576,900,000
Covered loans, net of allowance	518,500,000	549,100,000
FDIC indemnification asset	34,600,000	40,200,000
Financial Liabilities:
Deposits	669,300,000	674,500,000
Short-term borrowings	4,400,000	2,900,000
Long-term debt	95,200,000	99,000,000
Carrying Amount
Financial Assets:
Cash and due from banks	433,700,000	336,500,000
Due from banks - interest-bearing	334,000,000	120,000,000
Securities purchased under resale agreements	200,000,000	200,000,000
Securities held-to-maturity	3,413,800,000	3,427,000,000
Loans and leases, net of allowance	20,601,500,000	20,027,100,000
Covered loans, net of allowance	470,500,000	502,400,000
FDIC indemnification asset	43,300,000	50,500,000
Investment in FHLB and FRB stock	58,400,000	58,400,000
Financial Liabilities:
Deposits	28,517,100,000	28,108,100,000
Short-term borrowings	4,400,000	322,900,000
Long-term debt	634,400,000	638,600,000
Fair Value
Financial Assets:
Cash and due from banks	433,700,000	336,500,000
Due from banks - interest-bearing	334,000,000	120,000,000
Securities purchased under resale agreements	202,100,000	201,100,000
Securities held-to-maturity	3,510,600,000	3,484,600,000
Loans and leases, net of allowance	21,153,400,000	20,576,900,000
Covered loans, net of allowance	518,500,000	549,100,000
FDIC indemnification asset	34,600,000	40,200,000
Investment in FHLB and FRB stock	58,400,000	58,400,000
Financial Liabilities:
Deposits	28,518,300,000	28,109,600,000
Short-term borrowings	4,400,000	322,900,000
Long-term debt	$ 712,800,000	$ 704,300,000

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2015

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 1. Summary of Significant Accounting Policies

Organization

City National Corporation (the “Corporation”) is the holding company for City National Bank (the “Bank”). The Bank delivers banking, investment and trust services through 75 offices in Southern California, the San Francisco Bay area, Nevada, New York City, Nashville, Tennessee and Atlanta, Georgia. As of March 31, 2015, the Corporation had four consolidated investment advisory affiliates and one unconsolidated subsidiary, Business Bancorp Capital Trust I. Because the Bank comprises substantially all of the business of the Corporation, references to the “Company” mean the Corporation and the Bank together. The Corporation is approved as a financial holding company pursuant to the Gramm-Leach-Bliley Act of 1999.

Consolidation

The consolidated financial statements of the Company include the accounts of the Corporation, its non-bank subsidiaries, the Bank and the Bank’s wholly owned subsidiaries, after the elimination of all material intercompany transactions. It also includes noncontrolling interest, which is the portion of equity in a subsidiary not attributable to a parent. Redeemable noncontrolling interests are noncontrolling ownership interests that are redeemable at the option of the holder or outside the control of the issuer. The redeemable noncontrolling interests of third parties in the Corporation’s investment advisory affiliates are not considered to be permanent equity and are reflected in the mezzanine section between liabilities and equity in the consolidated balance sheets. Noncontrolling interests’ share of subsidiary earnings is reflected as Net income attributable to noncontrolling interest in the consolidated statements of income.

The Company’s investment management and wealth advisory affiliates are organized as limited liability companies. The Corporation generally owns a majority position in each affiliate and certain management members of each affiliate own the remaining shares. The Corporation has contractual arrangements with its affiliates whereby a percentage of revenue is allocable to fund affiliate operating expenses (“operating share”) while the remaining portion of revenue (“distributable revenue”) is allocable to the Corporation and the noncontrolling owners. All majority-owned affiliates that meet the prescribed criteria for consolidation are consolidated. The Corporation’s interests in investment management affiliates in which it holds a noncontrolling share are accounted for using the equity method. Additionally, the Company has various interests in variable interest entities (“VIEs”) that are not required to be consolidated. See Note 16 for a more detailed discussion on VIEs.

Use of Estimates

The Company’s accounting and reporting policies conform to generally accepted accounting principles (“GAAP”) and practices in the financial services industry. To prepare the financial statements in conformity with GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and income and expenses during the reporting period. Circumstances and events that differ significantly from those underlying the Company’s estimates and assumptions could cause actual financial results to differ from those estimates. The material estimates included in the financial statements relate to the allowance for loan and lease losses, the reserve for off-balance sheet credit commitments, other real estate owned (“OREO”), valuation of share-based compensation awards, income taxes, goodwill and intangible asset impairment, securities impairment, private equity and alternative investments impairment, valuation of assets and liabilities acquired in business combinations, including contingent consideration liabilities, subsequent valuations of acquired impaired loans, Federal Deposit Insurance Corporation (“FDIC”) indemnification asset, valuation of noncontrolling interest, and the valuation of financial assets and liabilities reported at fair value.

The Company has applied its critical accounting policies and estimation methods consistently in all periods presented in these financial statements. The Company’s estimates and assumptions are expected to change as changes in market conditions and the Company’s portfolio occur in subsequent periods.

Basis of Presentation

The Company is on the accrual basis of accounting for income and expenses. The results of operations reflect any adjustments, all of which are of a normal recurring nature, unless otherwise disclosed in this Form 10-Q, and which, in the opinion of management, are necessary for a fair presentation of the results for the periods presented. In accordance with the usual practice of banks, assets and liabilities of individual trust, agency and fiduciary funds have not been included in the financial statements. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

The results for the 2015 interim periods are not necessarily indicative of the results expected for the full year. The Company has not made any significant changes in its critical accounting policies or in its estimates and assumptions from those disclosed in its 2014 Annual Report other than the adoption of new accounting pronouncements and other authoritative guidance that became effective for the Company on or after January 1, 2015. Refer to Accounting Pronouncements for discussion of accounting pronouncements adopted in 2015.

Certain prior period amounts have been reclassified to conform to the current period presentation.

Accounting Pronouncements

The following is a summary of accounting pronouncements that became effective during the three months ended March 31, 2015:

· In January 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-01, Investments—Equity Method and Joint Ventures (Topic 323), Accounting for Investments in Qualified Affordable Housing Projects (“ASU 2014-01”). ASU 2014-01 permits an entity to make an accounting policy election to apply a proportionate amortization method to its low income housing tax credit investments if certain conditions are met. Under the proportionate amortization method, an investor amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received, and recognizes the amortization in the income statement as a component of income taxes attributable to continuing operations. On January 1, 2015, the Company adopted ASU 2014-01 and elected to apply the proportionate amortization method to its low income housing tax credit investments. Following adoption, the Company recognizes amortization of its tax credit investments as a component of income taxes. The Company previously recognized amortization as a component of noninterest expense. Prior periods presented in the Company’s consolidated financial statements have been adjusted to reflect retrospective adoption of ASU 2014-01 as follows:

	Consolidated Balance Sheet
	As of December 31, 2014
(in thousands)	As Reported		As Adjusted
			(Unaudited)
Assets
Deferred tax asset	$	230,376	$	233,811
Affordable housing investments	203,010		186,423
Other assets	537,826		537,847
Shareholders’ equity
Retained earnings	2,084,361		2,071,230

	Consolidated Income Statement
	For the three months ended
	March 31, 2014
(in thousands, except per share amounts)	As Reported		As Adjusted
	(Unaudited)
Noninterest expense
Other operating	$	12,846	$	8,805
Income taxes	26,288		31,010
Net income	55,210		54,529
Net income per common share, basic	$	0.91	$	0.90
Net income per common share, diluted	$	0.90	$	0.89

	Consolidated Statement of Cash Flows
	For the three months ended
	March 31, 2014
(in thousands)	As Reported			As Adjusted
	(Unaudited)
Cash Flows From Operating Activities
Net income .	$	55,210		$	54,529
Adjustments to net income:
Deferred income tax benefit .	(2,679		)	(3,237		)
Other, net	3,720			4,948
Net change in:
Other assets and other liabilities, net	(88,574		)	(88,563		)

· In January 2014, the FASB issued ASU 2014-04, Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40), Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (“ASU 2014-04”). ASU 2014-04 requires entities to reclassify consumer mortgage loans collateralized by residential real estate to OREO when either (1) the creditor obtains legal title to the residential real estate property or (2) the borrower conveys all interest in the property to the creditor to satisfy the loan by completing a deed in lieu of foreclosure or similar agreement. The Company adopted ASU 2014-04 effective January 1, 2015 on a prospective basis. Adoption of the new guidance did not have a significant impact on the Company’s consolidated financial statements.

· In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). ASU 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The Company adopted ASU 2014-08 effective January 1, 2015 on a prospective basis. Adoption of the new guidance did not have a significant impact on the Company’s consolidated financial statements.

· In June 2014, the FASB issued ASU 2014-11, Transfers and Servicing (Topic 860), Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (“ASU 2014-11”). ASU 2014-11 aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other repurchase agreements. Going forward, these transactions will all be accounted for as secured borrowings. Under the new guidance, parties to a repurchase financing transaction will be required to separately account for the initial transfer of the financial asset and the related repurchase agreement. The initial transfer of the financial asset would be accounted for as a sale by the transferor only if all criteria for derecognition have been met. ASU 2014-11 requires new or expanded disclosures for repurchase agreements and similar transactions accounted for as secured borrowings. The Company adopted ASU 2014-11 effective January 1, 2015. Adoption of the new guidance did not have a significant impact on the Company’s consolidated financial statements.

The following is a summary of recently issued accounting pronouncements:

· In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which significantly changes the consolidation analysis required under U.S. GAAP. The new consolidation guidance maintains two models: one for assessing most corporate entities based on the notion that majority voting rights indicate control (the voting model) and another for assessing entities that may be controlled through other means, such as management contracts or subordinated financial support (the variable interest model). Under the new guidance, limited partnerships will be VIEs, unless the limited partners have either substantive kick-out or participating rights. The ASU also changes the effect that fees paid to a decision maker or service provider have on the consolidation analysis. For entities other than limited partnerships, the ASU clarifies how to determine whether the equity holders (as a group) have power over the entity. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is allowed for all entities, but the guidance must be applied as of the beginning of the annual period containing the adoption date. Entities have the option of using either a full or modified retrospective approach for adoption. The Company is assessing the impact of the new guidance on its consolidated financial statements.

· In April 2015, the FASB issued ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires the debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The amendments in this ASU are to be applied on a retrospective basis. Adoption of the new guidance is not expected to have a significant impact on the Company’s consolidated financial statements.

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Other Real Estate Owned (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
OREO activity
Balance, beginning of year	$ 23,496,000	$ 38,092,000
Additions	1,085,000	2,033,000
Sales	(5,410,000)	(5,690,000)
Valuation adjustments	(1,662,000)	(168,000)
Balance, end of year	17,509,000	34,267,000
OREO Valuation Allowances	4,100,000		7,400,000
Non-Covered OREO
OREO activity
Balance, beginning of year	10,736,000	12,611,000
Sales	(4,779,000)	(3,186,000)
Valuation adjustments		(13,000)
Balance, end of year	5,957,000	9,412,000
Residential mortgage loans in process of foreclosure	6,900,000
Covered OREO
OREO activity
Balance, beginning of year	12,760,000	25,481,000
Additions	1,085,000	2,033,000
Sales	(631,000)	(2,504,000)
Valuation adjustments	(1,662,000)	(155,000)
Balance, end of year	$ 11,552,000	$ 24,855,000
FDIC reimbursement (as a percent)	80.00%
Payable to FDIC (as a percent)	80.00%

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Fair Value Measurements (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Fair Value Measurements
Fair value of assets transfers from Level 1 to Level 2	$ 0
Fair value of assets transfers from Level 2 to Level 1	0
Fair value of liabilities transfers from Level 1 to Level 2	0
Fair value of liabilities transfers from Level 2 to Level 1	0
Assets
Securities available-for-sale	5,210,388		5,882,983
Trading securities	102,546		173,188
Liabilities
FDIC clawback liability	15,963
Redeemable noncontrolling interest	37,326		39,978
U.S. Treasury
Assets
Securities available-for-sale	115,907		116,926
Federal agency - Debt
Assets
Securities available-for-sale	1,220,220		1,398,581
Federal agency - MBS
Assets
Securities available-for-sale	101,515		104,526
CMOs - Federal agency
Assets
Securities available-for-sale	3,204,886		3,580,590
CMOs - Non-agency
Assets
Securities available-for-sale	22,811		24,014
State and municipal
Assets
Securities available-for-sale	427,458		479,031
Other debt securities
Assets
Securities available-for-sale	116,441		176,169
Equity securities and mutual funds
Assets
Securities available-for-sale	1,150		3,146
Fair Value
Liabilities
Total liabilities at fair value	129,200		102,300
Measured on a Recurring Basis | Fair Value
Assets
Trading securities	102,546		173,188
Derivatives assets	76,695		51,586
Contingent consideration asset	2,930		2,930
Total assets at fair value	5,392,559		6,110,687
Percent of total assets	16.00%		19.00%
Liabilities
Derivative liabilities	76,938		51,309
Contingent consideration liability	35,401		34,983
FDIC clawback liability	15,963		15,106
Other liabilities	904		946
Total liabilities at fair value	129,206		102,344
Redeemable noncontrolling interest	37,326		39,978
Measured on a Recurring Basis | Fair Value | U.S. Treasury
Assets
Securities available-for-sale	115,907		116,926
Measured on a Recurring Basis | Fair Value | Federal agency - Debt
Assets
Securities available-for-sale	1,220,220		1,398,581
Measured on a Recurring Basis | Fair Value | Federal agency - MBS
Assets
Securities available-for-sale	101,515		104,526
Measured on a Recurring Basis | Fair Value | CMOs - Federal agency
Assets
Securities available-for-sale	3,204,886		3,580,590
Measured on a Recurring Basis | Fair Value | CMOs - Non-agency
Assets
Securities available-for-sale	22,811		24,014
Measured on a Recurring Basis | Fair Value | State and municipal
Assets
Securities available-for-sale	427,458		479,031
Measured on a Recurring Basis | Fair Value | Other debt securities
Assets
Securities available-for-sale	116,441		176,169
Measured on a Recurring Basis | Fair Value | Equity securities and mutual funds
Assets
Securities available-for-sale	1,150		3,146
Measured on a Recurring Basis | Quoted Prices in Active Markets Level 1
Assets
Trading securities	98,014		171,778
Derivatives assets	15,117		6,106
Total assets at fair value	230,188		297,956
Liabilities
Derivative liabilities	15,660		6,623
Total liabilities at fair value	15,660		6,623
Measured on a Recurring Basis | Quoted Prices in Active Markets Level 1 | U.S. Treasury
Assets
Securities available-for-sale	115,907		116,926
Measured on a Recurring Basis | Quoted Prices in Active Markets Level 1 | Equity securities and mutual funds
Assets
Securities available-for-sale	1,150		3,146
Measured on a Recurring Basis | Significant Other Observable Inputs Level 2
Assets
Trading securities	4,532		1,410
Derivatives assets	60,406		44,598
Total assets at fair value	5,154,716		5,805,372
Liabilities
Derivative liabilities	61,278		44,686
Other liabilities	904		946
Total liabilities at fair value	62,182		45,632
Measured on a Recurring Basis | Significant Other Observable Inputs Level 2 | Federal agency - Debt
Assets
Securities available-for-sale	1,220,220		1,398,581
Measured on a Recurring Basis | Significant Other Observable Inputs Level 2 | Federal agency - MBS
Assets
Securities available-for-sale	101,515		104,526
Measured on a Recurring Basis | Significant Other Observable Inputs Level 2 | CMOs - Federal agency
Assets
Securities available-for-sale	3,204,886		3,580,590
Measured on a Recurring Basis | Significant Other Observable Inputs Level 2 | CMOs - Non-agency
Assets
Securities available-for-sale	22,811		24,014
Measured on a Recurring Basis | Significant Other Observable Inputs Level 2 | State and municipal
Assets
Securities available-for-sale	423,905		475,484
Measured on a Recurring Basis | Significant Other Observable Inputs Level 2 | Other debt securities
Assets
Securities available-for-sale	116,441		176,169
Measured on a Recurring Basis | Significant Unobservable Inputs Level 3
Assets
Derivatives assets	1,172		882
Contingent consideration asset	2,930		2,930
Total assets at fair value	7,655		7,359
Liabilities
Contingent consideration liability	35,401		34,983
FDIC clawback liability	15,963		15,106
Total liabilities at fair value	51,364		50,089
Redeemable noncontrolling interest	37,326		39,978
Measured on a Recurring Basis | Significant Unobservable Inputs Level 3 | Maximum
Assets
Percent of total assets	1.00%		1.00%
Measured on a Recurring Basis | Significant Unobservable Inputs Level 3 | State and municipal
Assets
Securities available-for-sale	3,553		3,547
Measured on a Nonrecurring Basis
Net (losses) gains recognized for assets measured at fair value on nonrecurring basis
Total net (losses) gains recognized	(2,037)	56
Measured on a Nonrecurring Basis | Commercial real estate mortgages
Net (losses) gains recognized for assets measured at fair value on nonrecurring basis
Collateral dependent impaired loans:		(5)
Measured on a Nonrecurring Basis | Other real estate owned
Net (losses) gains recognized for assets measured at fair value on nonrecurring basis
Total net (losses) gains recognized	(1,637)	61
Measured on a Nonrecurring Basis | Private equity and alternative investments
Net (losses) gains recognized for assets measured at fair value on nonrecurring basis
Total net (losses) gains recognized	(400)
Measured on a Nonrecurring Basis | Fair Value
Assets
Total assets at fair value	7,584		5,644
Measured on a Nonrecurring Basis | Fair Value | Other real estate owned
Assets
Total assets at fair value	6,506		5,644
Measured on a Nonrecurring Basis | Fair Value | Private equity and alternative investments
Assets
Total assets at fair value	1,078
Measured on a Nonrecurring Basis | Significant Unobservable Inputs Level 3
Assets
Total assets at fair value	7,584		5,644
Measured on a Nonrecurring Basis | Significant Unobservable Inputs Level 3 | Maximum
Assets
Percent of total assets	1.00%		1.00%
Measured on a Nonrecurring Basis | Significant Unobservable Inputs Level 3 | Other real estate owned
Assets
Total assets at fair value	6,506		5,644
Measured on a Nonrecurring Basis | Significant Unobservable Inputs Level 3 | Private equity and alternative investments
Assets
Total assets at fair value	$ 1,078

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2015

Fair Value Measurements

Summary of assets and liabilities measured at fair value by level

			Fair Value Measurements at Reporting Date Using
(in thousands)	Balance as of March 31, 2015		Quoted Prices in Active Markets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Measured on a Recurring Basis
Assets
Securities available-for-sale:
U.S. Treasury	$	115,907	$	115,907	$	—	$	—
Federal agency - Debt	1,220,220		—		1,220,220		—
Federal agency - MBS	101,515		—		101,515		—
CMOs - Federal agency	3,204,886		—		3,204,886		—
CMOs - Non-agency	22,811		—		22,811		—
State and municipal	427,458		—		423,905		3,553
Other debt securities	116,441		—		116,441		—
Equity securities and mutual funds	1,150		1,150		—		—
Trading securities	102,546		98,014		4,532		—
Derivative assets (1)	76,695		15,117		60,406		1,172
Contingent consideration asset (1)	2,930		—		—		2,930
Total assets at fair value	$	5,392,559	$	230,188	$	5,154,716	$	7,655
Liabilities
Derivative liabilities	$	76,938	$	15,660	$	61,278	$	—
Contingent consideration liability	35,401		—		—		35,401
FDIC clawback liability	15,963		—		—		15,963
Other liabilities	904		—		904		—
Total liabilities at fair value (2)	$	129,206	$	15,660	$	62,182	$	51,364
Redeemable noncontrolling interest	$	37,326	$	—	$	—	$	37,326
Measured on a Nonrecurring Basis
Assets
Other real estate owned (3)	$	6,506	$	—	$	—	$	6,506
Private equity and alternative investments	1,078		—		—		1,078
Total assets at fair value	$	7,584	$	—	$	—	$	7,584

(1) Reported in Other assets in the consolidated balance sheets.

(2) Reported in Other liabilities in the consolidated balance sheets.

(3) Includes covered OREO.

			Fair Value Measurements at Reporting Date Using
(in thousands)	Balance as of December 31, 2014		Quoted Prices in Active Markets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Measured on a Recurring Basis
Assets
Securities available-for-sale:
U.S. Treasury	$	116,926	$	116,926	$	—	$	—
Federal agency - Debt	1,398,581		—		1,398,581		—
Federal agency - MBS	104,526		—		104,526		—
CMOs - Federal agency	3,580,590		—		3,580,590		—
CMOs - Non-agency	24,014		—		24,014		—
State and municipal	479,031		—		475,484		3,547
Other debt securities	176,169		—		176,169		—
Equity securities and mutual funds	3,146		3,146		—		—
Trading securities	173,188		171,778		1,410		—
Derivative assets (1)	51,586		6,106		44,598		882
Contingent consideration asset (1)	2,930		—		—		2,930
Total assets at fair value	$	6,110,687	$	297,956	$	5,805,372	$	7,359
Liabilities
Derivative liabilities	$	51,309	$	6,623	$	44,686	$	—
Contingent consideration liability	34,983		—		—		34,983
FDIC clawback liability	15,106		—		—		15,106
Other liabilities	946		—		946		—
Total liabilities at fair value (2)	$	102,344	$	6,623	$	45,632	$	50,089
Redeemable noncontrolling interest	$	39,978	$	—	$	—	$	39,978
Measured on a Nonrecurring Basis
Assets
Other real estate owned (3)	$	5,644	$	—	$	—	$	5,644
Total assets at fair value	$	5,644	$	—	$	—	$	5,644

(1) Reported in Other assets in the consolidated balance sheets.

(2) Reported in Other liabilities in the consolidated balance sheets.

(3) Includes covered OREO.

Schedule of reconciliation of Level 3 assets and liabilities measured on a recurring basis

	For the three months ended March 31, 2015
(in thousands)	Securities Available-for- Sale		Equity Warrants			Contingent Consideration Asset		Contingent Consideration Liability			FDIC Clawback Liability
Balance, beginning of period	$	3,547	$	882		$	2,930	$	(34,983	)	$	(15,106	)
Total realized/unrealized gains (losses):
Included in earnings	—		(8		)	—		—			(857		)
Included in other comprehensive income	6		—			—		—			—
Additions	—		298			—		—			—
Other (1)	—		—			—		(418		)	—
Balance, end of period	$	3,553	$	1,172		$	2,930	$	(35,401	)	$	(15,963	)

	For the three months ended March 31, 2014
(in thousands)	Securities Available-for- Sale			Contingent Consideration Liability			FDIC Clawback Liability
Balance, beginning of period	$	3,633		$	(49,900	)	$	(11,967	)
Total realized/unrealized gains (losses):
Included in earnings	—			—			(964		)
Included in other comprehensive income	(17		)	—			—
Settlements	—			16,250			—
Other (1)	—			(411		)	—
Balance, end of period	$	3,616		$	(34,061	)	$	(12,931	)

(1) Other rollforward activity consists of accretion of discount related to the contingent consideration liability.

Information About Nonrecurring Level 3 Fair Value Measurements

(in thousands)	Fair Value at March 31, 2015		Valuation Method	Unobservable Inputs
Other real estate owned	$	6,506	Third-party appraisal	- Fair values are primarily based on unadjusted appraised values. - A limited number of properties were valued using comparable sales values or income approaches, resulting in discounts to appraised values ranging from 34% to 50%.
Private equity and alternative investments	$	1,078	Cost recovery	- Fair values are based on management’s assumptions regarding recoverability of an investment based on fund operating results, investment performance, nature of the investment, market conditions, exit strategies and other relevant factors. - Fair values reflect discounts to investment carrying amounts ranging from 25% to 31%.

Schedule of total gains and losses for assets measured at fair value on a nonrecurring basis

	For the three months ended March 31,
(in thousands)	2015			2014
Collateral dependent impaired loans:
Commercial real estate mortgages	$	—		$	(5	)
Other real estate owned (1)	(1,637		)	61
Private equity and alternative investments	(400		)	—
Total net (losses) gains recognized	$	(2,037	)	$	56

(1) Net losses and gains on OREO include amounts related to covered OREO, a significant portion of which is reimbursable by or payable to the FDIC.

Schedule of carrying amounts and fair values of financial instruments

	March 31, 2015
	Carrying		Total		Fair Value Measurements Using
(in millions)	Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from banks	$	433.7	$	433.7	$	433.7	$	—	$	—
Due from banks - interest-bearing	334.0		334.0		334.0		—		—
Securities purchased under resale agreements	200.0		202.1		—		202.1		—
Securities held-to-maturity	3,413.8		3,510.6		—		3,510.6		—
Loans and leases, net of allowance	20,601.5		21,153.4		—		—		21,153.4
Covered loans, net of allowance	470.5		518.5		—		—		518.5
FDIC indemnification asset	43.3		34.6		—		—		34.6
Investment in FHLB and FRB stock	58.4		58.4		—		58.4		—
Financial Liabilities:
Deposits	$	28,517.1	$	28,518.3	$	—	$	27,849.0	$	669.3
Short-term borrowings	4.4		4.4		—		—		4.4
Long-term debt	634.4		712.8		—		617.6		95.2

	December 31, 2014
	Carrying		Total		Fair Value Measurements Using
(in millions)	Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from banks	$	336.5	$	336.5	$	336.5	$	—	$	—
Due from banks - interest-bearing	120.0		120.0		120.0		—		—
Securities purchased under resale agreements	200.0		201.1		—		201.1		—
Securities held-to-maturity	3,427.0		3,484.6		—		3,484.6		—
Loans and leases, net of allowance	20,027.1		20,576.9		—		—		20,576.9
Covered loans, net of allowance	502.4		549.1		—		—		549.1
FDIC indemnification asset	50.5		40.2		—		—		40.2
Investment in FHLB and FRB stock	58.4		58.4		—		58.4		—
Financial Liabilities:
Deposits	$	28,108.1	$	28,109.6	$	—	$	27,435.1	$	674.5
Short-term borrowings	322.9		322.9		320.0		—		2.9
Long-term debt	638.6		704.3		—		605.3		99.0

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2015

Summary of Significant Accounting Policies

Schedule of Condensed Financial Statements

	Consolidated Balance Sheet
	As of December 31, 2014
(in thousands)	As Reported		As Adjusted
			(Unaudited)
Assets
Deferred tax asset	$	230,376	$	233,811
Affordable housing investments	203,010		186,423
Other assets	537,826		537,847
Shareholders’ equity
Retained earnings	2,084,361		2,071,230

	Consolidated Income Statement
	For the three months ended
	March 31, 2014
(in thousands, except per share amounts)	As Reported		As Adjusted
	(Unaudited)
Noninterest expense
Other operating	$	12,846	$	8,805
Income taxes	26,288		31,010
Net income	55,210		54,529
Net income per common share, basic	$	0.91	$	0.90
Net income per common share, diluted	$	0.90	$	0.89

	Consolidated Statement of Cash Flows
	For the three months ended
	March 31, 2014
(in thousands)	As Reported			As Adjusted
	(Unaudited)
Cash Flows From Operating Activities
Net income .	$	55,210		$	54,529
Adjustments to net income:
Deferred income tax benefit .	(2,679		)	(3,237		)
Other, net	3,720			4,948
Net change in:
Other assets and other liabilities, net	(88,574		)	(88,563		)

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Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Allowance for Loan and Lease Losses
Beginning Balance	$ 310,149	$ 302,584
Charge-offs	(3,102)	(2,508)
Recoveries	2,660	6,678
Net recoveries (charge-offs)	(442)	4,170
Transfers from (to) Reserve for off Balance Sheet Credit Commitments	(849)	(964)
Ending Balance	308,858	305,790
Allowance individually evaluated for impairment	784	2,857
Allowance collectively evaluated for impairment	308,074	302,933
Loans and leases, excluding covered loans	20,910,355	17,751,385	20,337,206
Loans and leases, individually evaluated for impairment	52,048	100,746
Loans and leases, collectively evaluated for impairment	20,858,307	17,650,639
Reserve for Off Balance Sheet Credit Commitments
Balance, beginning of the year	27,811	33,944
Transfers (to) from allowance for loan and lease losses	849	964
Balance, end of the year	28,660	34,908
Commercial (includes lease financing)
Allowance for Loan and Lease Losses
Beginning Balance	115,855	117,103
Charge-offs	(2,825)	(1,959)
Recoveries	1,116	1,732
Net recoveries (charge-offs)	(1,709)	(227)
Provision for credit losses on loans and leases, excluding covered loans	6,520	4,698
Ending Balance	120,666	121,574
Allowance individually evaluated for impairment	471	2,557
Allowance collectively evaluated for impairment	120,195	119,017
Loans and leases, excluding covered loans	10,101,190	8,557,041
Loans and leases, individually evaluated for impairment	7,600	28,683
Loans and leases, collectively evaluated for impairment	10,093,590	8,528,358
Commercial real estate mortgages
Allowance for Loan and Lease Losses
Beginning Balance	44,745	50,678
Charge-offs		(5)
Recoveries	1,160	100
Net recoveries (charge-offs)	1,160	95
Provision for credit losses on loans and leases, excluding covered loans	1,112	588
Ending Balance	47,017	51,361
Allowance individually evaluated for impairment	273	300
Allowance collectively evaluated for impairment	46,744	51,061
Loans and leases, excluding covered loans	3,737,137	3,280,868	3,539,703
Loans and leases, individually evaluated for impairment	22,879	41,924
Loans and leases, collectively evaluated for impairment	3,714,258	3,238,944
Residential mortgages
Allowance for Loan and Lease Losses
Beginning Balance	10,296	11,540
Charge-offs		(482)
Recoveries	39	35
Net recoveries (charge-offs)	39	(447)
Provision for credit losses on loans and leases, excluding covered loans	(368)	502
Ending Balance	9,967	11,595
Allowance individually evaluated for impairment	40
Allowance collectively evaluated for impairment	9,927	11,595
Loans and leases, excluding covered loans	5,299,947	4,682,055	5,106,803
Loans and leases, individually evaluated for impairment	11,655	7,904
Loans and leases, collectively evaluated for impairment	5,288,292	4,674,151
Real estate construction
Allowance for Loan and Lease Losses
Beginning Balance	9,115	6,351
Recoveries	87	4,388
Net recoveries (charge-offs)	87	4,388
Provision for credit losses on loans and leases, excluding covered loans	1,032	(4,271)
Ending Balance	10,234	6,468
Allowance collectively evaluated for impairment	10,234	6,468
Loans and leases, excluding covered loans	794,274	389,188	710,224
Loans and leases, individually evaluated for impairment	8,979	18,788
Loans and leases, collectively evaluated for impairment	785,295	370,400
Home equity loans and lines of credit
Allowance for Loan and Lease Losses
Beginning Balance	6,609	6,677
Charge-offs		(16)
Recoveries	38	159
Net recoveries (charge-offs)	38	143
Provision for credit losses on loans and leases, excluding covered loans	(286)	(401)
Ending Balance	6,361	6,419
Allowance collectively evaluated for impairment	6,361	6,419
Loans and leases, excluding covered loans	791,731	691,338	785,796
Loans and leases, individually evaluated for impairment	935	3,447
Loans and leases, collectively evaluated for impairment	790,796	687,891
Installment
Allowance for Loan and Lease Losses
Beginning Balance	2,228	1,842
Charge-offs	(277)	(46)
Recoveries	220	264
Net recoveries (charge-offs)	(57)	218
Provision for credit losses on loans and leases, excluding covered loans	(18)	(236)
Ending Balance	2,153	1,824
Allowance collectively evaluated for impairment	2,153	1,824
Loans and leases, excluding covered loans	186,076	150,895	184,613
Loans and leases, collectively evaluated for impairment	186,076	150,895
Qualitative
Allowance for Loan and Lease Losses
Beginning Balance	121,301	108,393
Provision for credit losses on loans and leases, excluding covered loans	(7,992)	(880)
Transfers from (to) Reserve for off Balance Sheet Credit Commitments	(849)	(964)
Ending Balance	112,460	106,549
Allowance collectively evaluated for impairment	$ 112,460	$ 106,549

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Fair Value Measurements (Detail 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Total realized/unrealized gains (losses):
Transfers into/out of level 3, assets	$ 0	$ 0
Transfers into/out of level 3, liabilities	0	0
Securities Available-for-Sale
Level 3 Assets Measured on a Recurring Basis
Balance, beginning of period	3,547	3,633
Total realized/unrealized gains (losses):
Included in other comprehensive income	6	(17)
Balance, end of period	3,553	3,616
Equity Warrants
Level 3 Assets Measured on a Recurring Basis
Balance, beginning of period	882
Total realized/unrealized gains (losses):
Included in earnings	(8)
Additions	298
Balance, end of period	1,172
Contingent Consideration Asset
Level 3 Assets Measured on a Recurring Basis
Balance, beginning of period			2,930
Total realized/unrealized gains (losses):
Balance, end of period	$ 2,930		$ 2,930

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Securities (Tables)

3 Months Ended

Mar. 31, 2015

Securities

Summary of amortized cost and estimated fair value for the major categories of securities available-for-sale and held-to-maturity

			Gross		Gross
	Amortized		Unrealized		Unrealized
(in thousands)	Cost		Gains		Losses			Fair Value
March 31, 2015
Securities available-for-sale:
U.S. Treasury	$	115,893	$	29	$	(15	)	$	115,907
Federal agency - Debt	1,219,481		1,168		(429		)	1,220,220
Federal agency - MBS	99,891		2,498		(874		)	101,515
CMOs - Federal agency	3,204,823		22,016		(21,953		)	3,204,886
CMOs - Non-agency	23,147		24		(360		)	22,811
State and municipal	421,419		6,257		(218		)	427,458
Other debt securities	115,006		1,438		(3		)	116,441
Total debt securities	5,199,660		33,430		(23,852		)	5,209,238
Equity securities and mutual funds	1,341		219		(410		)	1,150
Total securities available-for-sale	$	5,201,001	$	33,649	$	(24,262	)	$	5,210,388
Securities held-to-maturity (1):
Federal agency - Debt	$	286,581	$	9,923	$	(72	)	$	296,432
Federal agency - MBS	556,931		20,346		(567		)	576,710
CMOs - Federal agency	1,766,325		48,270		(2,749		)	1,811,846
State and municipal	717,937		23,084		(1,810		)	739,211
Other debt securities	86,032		322		—			86,354
Total securities held-to-maturity	$	3,413,806	$	101,945	$	(5,198	)	$	3,510,553
December 31, 2014
Securities available-for-sale:
U.S. Treasury	$	116,919	$	17	$	(10	)	$	116,926
Federal agency - Debt	1,401,303		558		(3,280		)	1,398,581
Federal agency - MBS	102,939		2,601		(1,014		)	104,526
CMOs - Federal agency	3,599,831		19,628		(38,869		)	3,580,590
CMOs - Non-agency	24,385		40		(411		)	24,014
State and municipal	473,272		6,139		(380		)	479,031
Other debt securities	174,352		1,817		—			176,169
Total debt securities	5,893,001		30,800		(43,964		)	5,879,837
Equity securities and mutual funds	1,508		1,988		(350		)	3,146
Total securities available-for-sale	$	5,894,509	$	32,788	$	(44,314	)	$	5,882,983
Securities held-to-maturity (1):
Federal agency - Debt	$	292,932	$	6,430	$	(255	)	$	299,107
Federal agency - MBS	553,589		13,427		(2,275		)	564,741
CMOs - Federal agency	1,811,574		29,998		(10,292		)	1,831,280
State and municipal	682,705		22,732		(1,997		)	703,440
Other debt securities	86,231		72		(224		)	86,079
Total securities held-to-maturity	$	3,427,031	$	72,659	$	(15,043	)	$	3,484,647

(1) Securities held-to-maturity are presented in the consolidated balance sheets at amortized cost. 

Schedule of gross realized gains and losses on sales and calls of securities (including trading securities) available-for-sale

	For the three months ended
	March 31,
(in thousands)	2015			2014
Gross realized gains	$	3,392		$	2,602
Gross realized losses	(16		)	(480		)
Net realized gains	$	3,376		$	2,122

Schedule of remaining maturities of debt securities included in the securities portfolio

The following table provides the expected remaining maturities of debt securities included in the securities portfolio at March 31, 2015,

(in thousands)	One year or less		Over 1 year through 5 years		Over 5 years through 10 years		Over 10 years		Total
Securities available-for-sale:
U.S. Treasury	$	98,400	$	17,507	$	—	$	—	$	115,907
Federal agency - Debt	597,445		622,775		—		—		1,220,220
Federal agency - MBS	—		83,971		17,544		—		101,515
CMOs - Federal agency	157,341		3,047,545		—		—		3,204,886
CMOs - Non-agency	1,381		21,430		—		—		22,811
State and municipal	171,999		252,104		—		3,355		427,458
Other	57,142		59,299		—		—		116,441
Total debt securities available-for-sale	$	1,083,708	$	4,104,631	$	17,544	$	3,355	$	5,209,238
Amortized cost	$	1,081,124	$	4,097,536	$	17,600	$	3,400	$	5,199,660
Securities held-to-maturity:
Federal agency - Debt	$	—	$	—	$	132,829	$	153,752	$	286,581
Federal agency - MBS	—		49,153		503,264		4,514		556,931
CMOs - Federal agency	—		867,361		898,964		—		1,766,325
State and municipal	—		177,608		454,244		86,085		717,937
Other	—		86,032		—		—		86,032
Total debt securities held-to-maturity at amortized cost	$	—	$	1,180,154	$	1,989,301	$	244,351	$	3,413,806

Schedule of roll forward of credit-related other-than-temporary impairment recognized in earnings for debt securities

	For the three months ended
	March 31,
(in thousands)	2015		2014
Balance, beginning of period	$	2,470	$	4,549
Subsequent credit-related impairment	65		—
Balance, end of period	$	2,535	$	4,549

Summary of the gross unrealized losses and fair value of investment securities that are in an unrealized loss position aggregated by investment category and length of time

	Less than 12 months				12 months or greater				Total
(in thousands)	Fair Value		Estimated Unrealized Loss		Fair Value		Estimated Unrealized Loss		Fair Value		Estimated Unrealized Loss
March 31, 2015
Securities available-for-sale:
U.S. Treasury	$	66,688	$	15	$	—	$	—	$	66,688	$	15
Federal agency - Debt	466,094		429		—		—		466,094		429
Federal agency - MBS	—		—		56,741		874		56,741		874
CMOs - Federal agency	549,307		1,652		1,195,370		20,301		1,744,677		21,953
CMOs - Non-agency	1,928		16		12,331		344		14,259		360
State and municipal	107,251		171		3,553		47		110,804		218
Other debt securities	12,609		3		—		—		12,609		3
Total debt securities	1,203,877		2,286		1,267,995		21,566		2,471,872		23,852
Equity securities and mutual funds	477		410		—		—		477		410
Total securities available-for-sale	$	1,204,354	$	2,696	$	1,267,995	$	21,566	$	2,472,349	$	24,262
Securities held-to-maturity:
Federal agency - Debt	$	—	$	—	$	5,950	$	72	$	5,950	$	72
Federal agency - MBS	34,532		81		40,762		486		75,294		567
CMOs - Federal agency	180,042		937		180,742		1,812		360,784		2,749
State and municipal	83,998		733		33,863		1,077		117,861		1,810
Total securities held-to-maturity	$	298,572	$	1,751	$	261,317	$	3,447	$	559,889	$	5,198
December 31, 2014
Securities available-for-sale:
U.S. Treasury	$	15,814	$	10	$	—	$	—	$	15,814	$	10
Federal agency - Debt	1,008,234		2,622		135,868		658		1,144,102		3,280
Federal agency - MBS	35		—		57,970		1,014		58,005		1,014
CMOs - Federal agency	871,026		3,417		1,261,695		35,452		2,132,721		38,869
CMOs - Non-agency	1,949		15		12,720		396		14,669		411
State and municipal	130,208		314		4,183		66		134,391		380
Total debt securities	2,027,266		6,378		1,472,436		37,586		3,499,702		43,964
Equity securities and mutual funds	538		350		—		—		538		350
Total securities available-for-sale	$	2,027,804	$	6,728	$	1,472,436	$	37,586	$	3,500,240	$	44,314
Securities held-to-maturity:
Federal agency - Debt	$	—	$	—	$	26,316	$	255	$	26,316	$	255
Federal agency - MBS	4,800		21		114,856		2,254		119,656		2,275
CMOs - Federal agency	202,014		2,247		588,019		8,045		790,033		10,292
State and municipal	14,851		76		95,647		1,921		110,498		1,997
Other debt securities	61,813		224		—		—		61,813		224
Total securities held-to-maturity	$	283,478	$	2,568	$	824,838	$	12,475	$	1,108,316	$	15,043

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Other Investments (Tables)

3 Months Ended

Mar. 31, 2015

Other Investments

Summary of investments by fund type

(in thousands)	March 31,		December 31,
Fund Type	2015		2014
Private equity and venture capital	$	18,095	$	18,605
Real estate	7,320		7,081
Hedge	1,168		1,668
Other (1)	2,605		1,858
Total	$	29,188	$	29,212

(1) Includes direct investments in a limited number of start-up companies.

Schedule of private equity and alternative investments measured at fair value on a nonrecurring basis

The table below provides information as of March 31, 2015 on private equity and alternative investments measured at fair value on a nonrecurring basis due to the recognition of impairment:

(in thousands) Fund Type	Fair Value		Unfunded Commitments		Redemption Frequency	Redemption Notice Period
Private equity and venture capital	$	328	$	179	None (1)	N/A
Other investments	750		—		None	N/A
Total	$	1,078	$	179

(1) Funds make periodic distributions of income but do not permit redemptions prior to the end of the investment term.

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Net income attributable to redeemable noncontrolling interest	$ 553	$ 699

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Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Tables)

3 Months Ended

Mar. 31, 2015

Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments

Summary of loans

	March 31,			December 31,
(in thousands)	2015			2014
Commercial	$	9,455,621		$	9,360,976
Commercial real estate mortgages	3,737,137			3,539,703
Residential mortgages	5,299,947			5,106,803
Real estate construction	794,274			710,224
Home equity loans and lines of credit	791,731			785,796
Installment	186,076			184,613
Lease financing	645,569			649,091
Loans and leases, excluding covered loans	20,910,355			20,337,206
Less: Allowance for loan and lease losses	(308,858		)	(310,149		)
Loans and leases, excluding covered loans, net	20,601,497			20,027,057
Covered loans	480,236			510,979
Less: Allowance for loan losses	(9,752		)	(8,608		)
Covered loans, net	470,484			502,371
Total loans and leases	$	21,390,591		$	20,848,185
Total loans and leases, net	$	21,071,981		$	20,529,428

Summary of major categories of covered loans

	March 31,			December 31,
(in thousands)	2015			2014
Commercial	$	2,153		$	1,969
Commercial real estate mortgages	453,647			481,689
Residential mortgages	3,715			4,455
Real estate construction	16,813			18,790
Home equity loans and lines of credit	3,655			3,820
Installment	253			256
Covered loans	480,236			510,979
Less: Allowance for loan losses	(9,752		)	(8,608		)
Covered loans, net	$	470,484		$	502,371

Schedule of information on covered loans and loss-sharing terms by acquired entity

(in thousands)	Imperial Capital Bank		1st Pacific Bank		Sun West Bank		Nevada Commerce Bank		Total
Carrying value of covered loans as of:
March 31, 2015	$	429,570	$	22,787	$	8,497	$	19,382	$	480,236
December 31, 2014	456,177		23,895		9,353		21,554		510,979
As of March 31, 2015:
FDIC indemnification asset	$	38,935	$	1,596	$	276	$	2,449	$	43,256
FDIC clawback liability	—		13,159		2,599		205		15,963
Expiration date of FDIC loss sharing:
Commercial (1)	12/31/2016		6/30/2015		6/30/2015		6/30/2016
Residential	12/31/2019		5/31/2020		5/31/2020		4/30/2021
Termination date of FDIC loss-sharing agreements:
Commercial (1)	12/19/2017		5/8/2018		5/29/2018		6/30/2019
Residential	12/31/2019		5/31/2020		5/31/2020		4/30/2021

(1) The Company is subject to sharing 80 percent of its recoveries with the FDIC up to the last day of the quarter in which the termination dates of the commercial loss-sharing agreements occur.

Summary of accretable yield for acquired impaired loans

	For the three months ended March 31,
(in thousands)	2015			2014
Balance, beginning of period	$	168,469		$	219,018
Accretion	(9,876		)	(12,528		)
Reclassifications from nonaccretable difference	4,816			4,305
Disposals and other	(8,853		)	(8,704		)
Balance, end of period	$	154,556		$	202,091

Summary of allowance for loan and lease losses on non-covered loans

(in thousands)	Commercial (1)			Commercial Real Estate Mortgages			Residential Mortgages			Real Estate Construction			Home Equity Loans and Lines of Credit			Installment			Qualitative			Total
Three months ended March 31, 2015
Allowance for loan and lease losses:
Beginning balance	$	115,855		$	44,745		$	10,296		$	9,115		$	6,609		$	2,228		$	121,301		$	310,149
Charge-offs	(2,825		)	—			—			—			—			(277		)	—			(3,102		)
Recoveries	1,116			1,160			39			87			38			220			—			2,660
Net (charge-offs) recoveries	(1,709		)	1,160			39			87			38			(57		)	—			(442		)
(Reversal of) provision for credit losses	6,520			1,112			(368		)	1,032			(286		)	(18		)	(7,992		)	—
Transfers to reserve for off-balance sheet credit commitments	—			—			—			—			—			—			(849		)	(849		)
Ending balance	$	120,666		$	47,017		$	9,967		$	10,234		$	6,361		$	2,153		$	112,460		$	308,858
Ending balance of allowance:
Individually evaluated for impairment	$	471		$	273		$	40		$	—		$	—		$	—		$	—		$	784
Collectively evaluated for impairment	120,195			46,744			9,927			10,234			6,361			2,153			112,460			308,074
Loans and leases, excluding covered loans
Ending balance of loans and leases:
Loans and leases, excluding covered loans	$	10,101,190		$	3,737,137		$	5,299,947		$	794,274		$	791,731		$	186,076		$	—		$	20,910,355
Individually evaluated for impairment	7,600			22,879			11,655			8,979			935			—			—			52,048
Collectively evaluated for impairment	10,093,590			3,714,258			5,288,292			785,295			790,796			186,076			—			20,858,307
Three months ended March 31, 2014
Allowance for loan and lease losses:
Beginning balance	$	117,103		$	50,678		$	11,540		$	6,351		$	6,677		$	1,842		$	108,393		$	302,584
Charge-offs	(1,959		)	(5		)	(482		)	—			(16		)	(46		)	—			(2,508		)
Recoveries	1,732			100			35			4,388			159			264			—			6,678
Net (charge-offs) recoveries	(227		)	95			(447		)	4,388			143			218			—			4,170
(Reversal of) provision for credit losses	4,698			588			502			(4,271		)	(401		)	(236		)	(880		)	—
Transfers to reserve for off-balance sheet credit commitments	—			—			—			—			—			—			(964		)	(964		)
Ending balance	$	121,574		$	51,361		$	11,595		$	6,468		$	6,419		$	1,824		$	106,549		$	305,790
Ending balance of allowance:
Individually evaluated for impairment	$	2,557		$	300		$	—		$	—		$	—		$	—		$	—		$	2,857
Collectively evaluated for impairment	119,017			51,061			11,595			6,468			6,419			1,824			106,549			302,933
Loans and leases, excluding covered loans
Ending balance of loans and leases:
Loans and leases, excluding covered loans	$	8,557,041		$	3,280,868		$	4,682,055		$	389,188		$	691,338		$	150,895		$	—		$	17,751,385
Individually evaluated for impairment	28,683			41,924			7,904			18,788			3,447			—			—			100,746
Collectively evaluated for impairment	8,528,358			3,238,944			4,674,151			370,400			687,891			150,895			—			17,650,639

(1) Includes lease financing loans.

Summary of activity in the reserve for off-balance sheet credit commitments

	For the three months ended March 31,
(in thousands)	2015		2014
Balance, beginning of period	$	27,811	$	33,944
Transfers from allowance for loan and lease losses	849		964
Balance, end of period	$	28,660	$	34,908

Schedule of impaired loans, excluding covered loans

			Unpaid				For the three months ended March 31, 2015
(in thousands)	Recorded Investment		Contractual Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
March 31, 2015
With no related allowance recorded:
Commercial	$	1,449	$	1,637	$	—	$	5,172	$	5
Commercial real estate mortgages	17,838		18,762		—		18,848		208
Residential mortgages:
Fixed	7,720		7,980		—		7,738		10
Variable	—		—		—		112		—
Total residential mortgages	7,720		7,980		—		7,850		10
Real estate construction:
Land	8,979		11,119		—		7,794		62
Total real estate construction	8,979		11,119		—		7,794		62
Home equity loans and lines of credit	935		2,043		—		1,602		—
Total with no related allowance	$	36,921	$	41,541	$	—	$	41,266	$	285
With an allowance recorded:
Commercial	$	6,151	$	11,425	$	471	$	6,310	$	17
Commercial real estate mortgages	5,041		5,375		273		5,113		71
Residential mortgages:
Variable	3,935		3,926		40		3,946		26
Total residential mortgages	3,935		3,926		40		3,946		26
Total with an allowance	$	15,127	$	20,726	$	784	$	15,369	$	114
Total impaired loans by type:
Commercial	$	7,600	$	13,062	$	471	$	11,482	$	22
Commercial real estate mortgages	22,879		24,137		273		23,961		279
Residential mortgages	11,655		11,906		40		11,796		36
Real estate construction	8,979		11,119		—		7,794		62
Home equity loans and lines of credit	935		2,043		—		1,602		—
Total impaired loans	$	52,048	$	62,267	$	784	$	56,635	$	399

(in thousands)	Recorded Investment		Unpaid Contractual Principal Balance		Related Allowance
December 31, 2014
With no related allowance recorded:
Commercial	$	8,894	$	9,182	$	—
Commercial real estate mortgages	19,858		22,416		—
Residential mortgages:
Fixed	7,756		7,994		—
Variable	224		262		—
Total residential mortgages	7,980		8,256		—
Real estate construction:
Land	6,609		8,758		—
Total real estate construction	6,609		8,758		—
Home equity loans and lines of credit	2,270		3,375		—
Total with no related allowance	$	45,611	$	51,987	$	—
With an allowance recorded:
Commercial	$	6,470	$	8,878	$	399
Commercial real estate mortgages	5,184		5,526		281
Residential mortgages:
Variable	3,957		3,948		48
Total residential mortgages	3,957		3,948		48
Total with an allowance	$	15,611	$	18,352	$	728
Total impaired loans by type:
Commercial	$	15,364	$	18,060	$	399
Commercial real estate mortgages	25,042		27,942		281
Residential mortgages	11,937		12,204		48
Real estate construction	6,609		8,758		—
Home equity loans and lines of credit	2,270		3,375		—
Total impaired loans	$	61,222	$	70,339	$	728

			Unpaid				For the three months ended March 31, 2014
(in thousands)	Recorded Investment		Contractual Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
March 31, 2014
With no related allowance recorded:
Commercial	$	11,257	$	11,920	$	—	$	14,489	$	137
Commercial real estate mortgages	36,562		39,660		—		34,666		438
Residential mortgages:
Fixed	4,888		5,051		—		3,512		10
Variable	3,016		3,618		—		4,209		14
Total residential mortgages	7,904		8,669		—		7,721		24
Real estate construction:
Construction	5,484		6,766		—		5,484		55
Land	13,304		26,800		—		13,458		34
Total real estate construction	18,788		33,566		—		18,942		89
Home equity loans and lines of credit	3,447		4,505		—		2,888		—
Installment:
Consumer	—		—		—		8		—
Total installment	—		—		—		8		—
Total with no related allowance	$	77,958	$	98,320	$	—	$	78,714	$	688
With an allowance recorded:
Commercial	$	17,426	$	19,663	$	2,557	$	15,781	$	—
Commercial real estate mortgages	5,362		5,734		300		5,373		44
Residential mortgages:
Variable	—		—		—		837		—
Total residential mortgages	—		—		—		837		—
Total with an allowance	$	22,788	$	25,397	$	2,857	$	21,991	$	44
Total impaired loans by type:
Commercial	$	28,683	$	31,583	$	2,557	$	30,270	$	137
Commercial real estate mortgages	41,924		45,394		300		40,039		482
Residential mortgages	7,904		8,669		—		8,558		24
Real estate construction	18,788		33,566		—		18,942		89
Home equity loans and lines of credit	3,447		4,505		—		2,888		—
Installment	—		—		—		8		—
Total impaired loans	$	100,746	$	123,717	$	2,857	$	100,705	$	732

Schedule of troubled debt restructured loans

(in thousands)	Number of Contracts	Pre-Modification Outstanding Principal		Period-End Outstanding Principal		Financial Effects (1)
Three months ended March 31, 2015
Home equity loans and lines of credit	1	$	87	$	85	$	—
Total troubled debt restructured loans	1	$	87	$	85	$	—
Three months ended March 31, 2014
Commercial	2	$	4,098	$	4,071	$	—
Residential mortgages:
Variable	1	676		676		—
Total troubled debt restructured loans	3	$	4,774	$	4,747	$	—

(1) Financial effects are comprised of charge-offs and specific reserves recognized on troubled debt restructured (“TDR”) loans at modification date.

Schedule of troubled debt restructured loans that have subsequently defaulted

	For three months ended March 31, 2015
(in thousands)	Number of Contracts	Period-End Outstanding Principal		Period-End Specific Reserve
Commercial real estate mortgages	1	$	73	$	—

Summary of past due loans, excluding covered loans, based upon the length of time the loans have been past due

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and Accruing		Nonaccrual		Total Past Due and Nonaccrual Loans		Current		Total Loans and Leases
March 31, 2015
Commercial	$	4,130	$	5,586	$	—	$	8,192	$	17,908	$	9,437,713	$	9,455,621
Commercial real estate mortgages	185		—		—		2,901		3,086		3,734,051		3,737,137
Residential mortgages:
Fixed	—		618		379		10,793		11,790		1,466,330		1,478,120
Variable	—		3,985		—		1,339		5,324		3,816,503		3,821,827
Total residential mortgages	—		4,603		379		12,132		17,114		5,282,833		5,299,947
Real estate construction:
Construction	—		—		—		—		—		766,840		766,840
Land	—		—		—		6,598		6,598		20,836		27,434
Total real estate construction	—		—		—		6,598		6,598		787,676		794,274
Home equity loans and lines of credit	—		350		240		3,507		4,097		787,634		791,731
Installment:
Commercial	—		—		—		—		—		249		249
Consumer	206		52		409		39		706		185,121		185,827
Total installment	206		52		409		39		706		185,370		186,076
Lease financing	703		—		—		7		710		644,859		645,569
Total	$	5,224	$	10,591	$	1,028	$	33,376	$	50,219	$	20,860,136	$	20,910,355
December 31, 2014
Commercial	$	8,462	$	325	$	148	$	15,096	$	24,031	$	9,336,945	$	9,360,976
Commercial real estate mortgages	693		—		—		3,575		4,268		3,535,435		3,539,703
Residential mortgages:
Fixed	—		309		921		10,365		11,595		1,390,357		1,401,952
Variable	—		1,165		—		1,578		2,743		3,702,108		3,704,851
Total residential mortgages	—		1,474		921		11,943		14,338		5,092,465		5,106,803
Real estate construction:
Construction	—		—		—		—		—		686,990		686,990
Land	—		—		—		6,598		6,598		16,636		23,234
Total real estate construction	—		—		—		6,598		6,598		703,626		710,224
Home equity loans and lines of credit	—		39		100		4,864		5,003		780,793		785,796
Installment:
Commercial	—		—		—		—		—		298		298
Consumer	324		113		346		84		867		183,448		184,315
Total installment	324		113		346		84		867		183,746		184,613
Lease financing	321		152		—		7		480		648,611		649,091
Total	$	9,800	$	2,103	$	1,515	$	42,167	$	55,585	$	20,281,621	$	20,337,206

Summary of the loan and lease portfolio, excluding covered loans, by loan type and credit quality classification

	March 31, 2015						December 31, 2014
(in thousands)	Nonclassified		Classified		Total		Nonclassified		Classified		Total
Commercial	$	9,383,150	$	72,471	$	9,455,621	$	9,304,636	$	56,340	$	9,360,976
Commercial real estate mortgages	3,697,901		39,236		3,737,137		3,511,229		28,474		3,539,703
Residential mortgages:
Fixed	1,456,060		22,060		1,478,120		1,375,175		26,777		1,401,952
Variable	3,792,414		29,413		3,821,827		3,675,723		29,128		3,704,851
Total residential mortgages	5,248,474		51,473		5,299,947		5,050,898		55,905		5,106,803
Real estate construction:
Construction	763,016		3,824		766,840		679,744		7,246		686,990
Land	18,475		8,959		27,434		16,636		6,598		23,234
Total real estate construction	781,491		12,783		794,274		696,380		13,844		710,224
Home equity loans and lines of credit	763,760		27,971		791,731		754,694		31,102		785,796
Installment:
Commercial	249		—		249		298		—		298
Consumer	185,152		675		185,827		183,190		1,125		184,315
Total installment	185,401		675		186,076		183,488		1,125		184,613
Lease financing	641,343		4,226		645,569		645,049		4,042		649,091
Total	$	20,701,520	$	208,835	$	20,910,355	$	20,146,374	$	190,832	$	20,337,206

Summary of the allowance for loan losses on covered loans

	For the three months ended March 31,
(in thousands)	2015		2014
Balance, beginning of period	$	8,608	$	15,922
Provision for losses	497		4,655
Change in allowance due to loan removals	647		(2,138		)
Balance, end of period	$	9,752	$	18,439

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Noncontrolling Interest (Tables)

3 Months Ended

Mar. 31, 2015

Noncontrolling Interest

Schedule of summary for redeemable noncontrolling interest

	For the three months ended March 31,
(in thousands)	2015			2014
Balance, beginning of period	$	39,978		$	39,768
Net income	553			699
Distributions to redeemable noncontrolling interest	(816		)	(347		)
Additions and redemptions, net	(2,662		)	92
Adjustments to fair value	273			5,429
Balance, end of period	$	37,326		$	45,641

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Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Accounts notes and loans receivable
Loans and leases, excluding covered loans	20,910,355,000	$ 20,337,206,000	$ 17,751,385,000
Less: Allowance for loan and lease losses	(308,858,000)	(310,149,000)	(305,790,000)	(302,584,000)
Loans and leases, excluding covered loans, net	20,601,497,000	20,027,057,000
Covered loans	480,236,000	510,979,000
Less: Allowance for loan losses	(9,752,000)	(8,608,000)	(18,439,000)	(15,922,000)
Covered loans, net	470,484,000	502,371,000
Total loans and leases	21,390,591,000	20,848,185,000
Net loans and leases	21,071,981,000	20,529,428,000
Net deferred costs (fees)	(100,000)	200,000
FDIC indemnification asset	43,256,000	50,511,000
FDIC clawback liability	15,963,000
Imperial Capital Bank
Accounts notes and loans receivable
Covered loans	429,570,000	456,177,000
FDIC indemnification asset	38,935,000
1st Pacific Bank
Accounts notes and loans receivable
Covered loans	22,787,000	23,895,000
FDIC indemnification asset	1,596,000
FDIC clawback liability	13,159,000
Sun West Bank
Accounts notes and loans receivable
Covered loans	8,497,000	9,353,000
FDIC indemnification asset	276,000
FDIC clawback liability	2,599,000
Nevada Commerce Bank
Accounts notes and loans receivable
Covered loans	19,382,000	21,554,000
FDIC indemnification asset	2,449,000
FDIC clawback liability	205,000
Commercial
Accounts notes and loans receivable
Loans and leases, excluding covered loans	9,455,621,000	9,360,976,000
Covered loans	2,153,000	1,969,000
Commercial | Imperial Capital Bank
Accounts notes and loans receivable
Sharing of recoveries with FDIC on expiration date (as a percent)	80.00%
Sharing of recoveries with FDIC on termination date (as a percent)	80.00%
Commercial | 1st Pacific Bank
Accounts notes and loans receivable
Sharing of recoveries with FDIC on expiration date (as a percent)	80.00%
Sharing of recoveries with FDIC on termination date (as a percent)	80.00%
Commercial | Sun West Bank
Accounts notes and loans receivable
Sharing of recoveries with FDIC on expiration date (as a percent)	80.00%
Sharing of recoveries with FDIC on termination date (as a percent)	80.00%
Commercial | Nevada Commerce Bank
Accounts notes and loans receivable
Sharing of recoveries with FDIC on expiration date (as a percent)	80.00%
Sharing of recoveries with FDIC on termination date (as a percent)	80.00%
Commercial real estate mortgages
Accounts notes and loans receivable
Loans and leases, excluding covered loans	3,737,137,000	3,539,703,000	3,280,868,000
Less: Allowance for loan and lease losses	(47,017,000)	(44,745,000)	(51,361,000)	(50,678,000)
Covered loans	453,647,000	481,689,000
Residential mortgages
Accounts notes and loans receivable
Loans and leases, excluding covered loans	5,299,947,000	5,106,803,000	4,682,055,000
Less: Allowance for loan and lease losses	(9,967,000)	(10,296,000)	(11,595,000)	(11,540,000)
Covered loans	3,715,000	4,455,000
Real estate construction
Accounts notes and loans receivable
Loans and leases, excluding covered loans	794,274,000	710,224,000	389,188,000
Less: Allowance for loan and lease losses	(10,234,000)	(9,115,000)	(6,468,000)	(6,351,000)
Covered loans	16,813,000	18,790,000
Home equity loans and lines of credit
Accounts notes and loans receivable
Loans and leases, excluding covered loans	791,731,000	785,796,000	691,338,000
Less: Allowance for loan and lease losses	(6,361,000)	(6,609,000)	(6,419,000)	(6,677,000)
Covered loans	3,655,000	3,820,000
Installment
Accounts notes and loans receivable
Loans and leases, excluding covered loans	186,076,000	184,613,000	150,895,000
Less: Allowance for loan and lease losses	(2,153,000)	(2,228,000)	(1,824,000)	(1,842,000)
Covered loans	253,000	256,000
Lease financing
Accounts notes and loans receivable
Loans and leases, excluding covered loans	645,569,000	$ 649,091,000

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Income Taxes (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Income tax expense (benefit)
Accrued interest and penalties relating to uncertain tax positions	$ 2,500,000		$ 2,500,000
Income taxes	$ 30,597,000	$ 31,010,000

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Assets
Cash and due from banks	$ 433,670	$ 336,470
Due from banks - interest-bearing	334,014	119,981
Federal funds sold and securities purchased under resale agreements	200,000	200,000
Securities available-for-sale - cost $5,201,001 and $5,894,509 at March 31, 2015 and December 31, 2014, respectively
Securities pledged as collateral	21,068	14,654
Held in portfolio	5,189,320	5,868,329
Securities held-to-maturity - fair value $3,510,553 and 3,484,647 at March 31, 2015 and December 31, 2014, respectively
Securities pledged as collateral	521,963	521,262
Held in portfolio	2,891,843	2,905,769
Trading securities	102,546	173,188
Loans and leases, excluding covered loans	20,910,355	20,337,206
Less: Allowance for loan and lease losses	308,858	310,149
Loans and leases, excluding covered loans, net	20,601,497	20,027,057
Covered loans, net of allowance for loan losses	470,484	502,371
Net loans and leases	21,071,981	20,529,428
Premises and equipment, net	202,208	207,700
Deferred tax asset	228,273	233,811
Goodwill	635,868	635,868
Customer-relationship intangibles, net	33,454	34,831
Affordable housing investments	190,347	186,423
Customers' acceptance liability	2,390	17,664
Other real estate owned ($11,552 and $12,760 covered by FDIC loss share at March 31, 2015 and December 31, 2014, respectively)	17,509	23,496
FDIC indemnification asset	43,256	50,511
Other assets	579,189	537,847
Total assets	32,698,899	32,597,232
Liabilities
Demand deposits	18,579,674	18,030,021
Interest checking deposits	2,751,487	2,736,391
Money market deposits	6,011,679	6,198,798
Savings deposits	506,188	469,931
Time deposits-under $100,000	152,121	155,568
Time deposits-$100,000 and over	515,999	517,394
Total deposits	28,517,148	28,108,103
Short-term borrowings	4,400	322,861
Long-term debt	634,425	638,600
Reserve for off-balance sheet credit commitments	28,660	27,811
Acceptances outstanding	2,390	17,664
Other liabilities	456,180	499,514
Total liabilities	29,643,203	29,614,553
Redeemable noncontrolling interest	37,326	39,978
Commitments and contingencies
Shareholders' Equity
Preferred stock, par value $1.00 per share; 5,000,000 shares authorized; 275,000 shares issued at March 31, 2015 and December 31, 2014, respectively	267,616	267,616
Common stock, par value $1.00 per share; 75,000,000 shares authorized; 55,510,321 and 55,162,455 shares issued at March 31, 2015 and December 31, 2014, respectively	55,510	55,162
Additional paid-in capital	599,800	578,046
Accumulated other comprehensive income (loss)	5,031	(7,074)
Retained earnings	2,109,157	2,071,230
Treasury shares, at cost - 313,965 and 377,224 shares at March 31, 2015 and December 31, 2014, respectively	(18,744)	(22,279)
Total common shareholders' equity	2,750,754	2,675,085
Total shareholders' equity	3,018,370	2,942,701
Total liabilities and shareholders' equity	$ 32,698,899	$ 32,597,232

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Fair Value Measurements (Detail 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Minimum
Information about valuation method, inputs and assumptions for nonrecurring Level 3 fair value measurements
Adjustments to appraised values from use of comparable sales values or income approaches (as a percent)	34.00%
Adjustments to investment carrying amounts (as a percent)	25.00%
Maximum
Information about valuation method, inputs and assumptions for nonrecurring Level 3 fair value measurements
Adjustments to appraised values from use of comparable sales values or income approaches (as a percent)	50.00%
Adjustments to investment carrying amounts (as a percent)	31.00%
Other real estate owned
Information about valuation method, inputs and assumptions for nonrecurring Level 3 fair value measurements
Fair value of assets	6,506
Private equity and alternative investments
Information about valuation method, inputs and assumptions for nonrecurring Level 3 fair value measurements
Fair value of assets	1,078

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash Flows From Operating Activities
Net income	$ 62,119	$ 54,529
Adjustments to net income:
Provision for losses on covered loans	497	4,655
Depreciation and amortization	14,982	7,828
Amortization of intangibles	1,377	1,487
Share-based employee compensation expense	6,227	5,397
Deferred income tax benefit	(3,211)	(3,237)
Gain on disposal of assets	(110)	(2,826)
Gain on sale of securities	(3,376)	(2,122)
Impairment loss on securities	65	0
Other, net	9,583	4,948
Net change in:
Trading securities	70,633	20,678
Other assets and other liabilities, net	(92,959)	(88,563)
Net cash provided by operating activities	65,827	2,774
Cash Flows From Investing Activities
Purchase of securities available-for-sale	(83,767)	(330,444)
Sales of securities available-for-sale	398,166	377,115
Maturities and paydowns of securities available-for-sale	375,712	823,410
Purchase of securities held-to-maturity	(42,637)	(282,679)
Maturities and paydowns of securities held-to-maturity	54,856	36,337
Loan originations, net of principal collections	(530,516)	(523,514)
Net payments for premises and equipment	(10,008)	(8,831)
Other investing activities, net	(851)	6,676
Net cash provided by investing activities	160,955	98,070
Cash Flows From Financing Activities
Net increase in deposits	409,045	52,329
Net decrease in federal funds purchased	(320,000)
Issuance of long-term debt	8,439	7,907
Repayment of long-term debt	(11,071)	(10,088)
Proceeds from exercise of stock options	21,320	13,207
Tax benefit from exercise of stock options	3,474	2,970
Cash dividends paid	(23,449)	(22,141)
Other financing activities, net	(3,307)	(16,250)
Net cash provided by financing activities	84,451	27,934
Net increase in cash and cash equivalents	311,233	128,778
Cash and cash equivalents at beginning of year	656,451	935,946
Cash and cash equivalents at end of period	967,684	1,064,724
Cash paid during the period for:
Interest	18,504	22,121
Income taxes	39,022	39,399
Non-cash investing activities:
Transfer of loans to other real estate owned	$ 1,085	$ 2,033

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Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail 7) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014 item	Mar. 31, 2015 item
Troubled debt restructured loans
Commitments to lend additional funds on restructured loans		$ 0
Total Troubled Debt Restructured Loans
Troubled debt restructured loans
Number of contracts	0
Commercial real estate mortgages
Troubled debt restructured loans
Number of contracts		1
Period-End Outstanding Principal		$ 73

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Shareholders' Equity (Tables)

3 Months Ended

Mar. 31, 2015

Shareholders' Equity

Schedule of components of AOCI

(in thousands)	March 31, 2015			December 31, 2014
Net unrealized gain (loss) on securities available-for-sale	$	5,045		$	(7,070	)
Foreign currency translation adjustments	(14		)	(4		)
Total accumulated other comprehensive income (loss)	$	5,031		$	(7,074	)

Schedule of components of total comprehensive income (loss)

	For the three months ended March 31, 2015									For the three months ended March 31, 2014
(in thousands)	Pre-tax			Tax expense (benefit)			Net-of-tax			Pre-tax			Tax expense (benefit)			Net-of-tax
Securities available-for-sale:
Net unrealized gains arising during the period	$	24,477		$	10,260		$	14,217		$	21,528		$	8,975		$	12,553
Reclassification adjustment for net gains included in net income (1)	(3,386		)	(1,417		)	(1,969		)	(2,192		)	(917		)	(1,275		)
Non-credit related impairment loss	(228		)	(95		)	(133		)	—			—			—
Total securities available-for-sale	20,863			8,748			12,115			19,336			8,058			11,278
Foreign currency translation adjustments	(10		)	—			(10		)	—			—			—
Total other comprehensive income	$	20,853		$	8,748		$	12,105		$	19,336		$	8,058		$	11,278

(1) Recognized in Gain on sale of securities in the consolidated statements of income.

Summary of entity's share repurchases activity

Period	Total Number of Shares Purchased	Average Price Paid per Share
January 1, 2015 to January 31, 2015	294	$	82.64
February 1, 2015 to February 28, 2015	28,854	89.91
March 1, 2015 to March 31, 2015	3,999	89.88
Total share repurchases	33,147	89.84

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Earnings per Common Share (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Basic EPS:
Net income attributable to City National Corporation	$ 61,566	$ 53,830
Less: Dividends on preferred stock	4,094	4,094
Net income available to common shareholders	57,472	49,736
Less: Earnings allocated to participating securities	529	536
Earnings allocated to common shareholders	56,943	49,200
Weighted-average common shares outstanding	55,422,000	54,689,000
Basic earnings per common share (in dollars per share)	$ 1.03	$ 0.90
Diluted EPS:
Earnings allocated to common shareholders	$ 56,948	$ 49,204
Weighted-average common shares outstanding	55,422,000	54,689,000
Dilutive effect of equity awards (in shares)	884,000	740,000
Weighted-average diluted common shares outstanding	56,306,000	55,429,000
Diluted earnings per common share (in dollars per share)	$ 1.01	$ 0.89
Stock options
Antidilutive securities not included in calculation of diluted EPS:
Antidilutive securities not included in calculation of diluted EPS (in shares)	200,000	400,000

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Employee Benefit Plans

3 Months Ended

Mar. 31, 2015

Employee Benefit Plans

Employee Benefit Plans

Note 14. Employee Benefit Plans

Defined Contribution Plan

The Company has a profit-sharing retirement plan with an Internal Revenue Code Section 401(k) feature covering eligible employees. Employer contributions are made annually into a trust fund and are allocated to participants based on their salaries. The profit sharing contribution requirement is based on a percentage of annual operating income subject to a percentage of salary cap. Eligible employees may contribute up to 50 percent of their salary to the 401(k) plan, but not more than the maximum allowed under IRS regulations. The Company matches 50 percent of the first 6 percent of covered compensation. The Company recorded total profit sharing and matching contribution expense of $6.0 million and $5.3 million for the three months ended March 31, 2015 and 2014, respectively.

Deferred Compensation Plan

The Company offers a deferred compensation plan for eligible employees and non-employee directors. Participants under the employee plan may make an annual irrevocable election to defer a portion of base salary and up to 100 percent of commission and incentive compensation while employed with the Company. Participants under the non-employee director plan also may make an annual irrevocable election to defer all or part of annual retainers, annual awards, committee chair retainers and meeting fees (collectively, “directors’ fees”) until board service with the Company ceases. The deferred compensation plans are nonqualified plans under IRS regulations. Deferrals are made on a pretax basis and are allocated among the investment crediting options available under the plans as directed by the plan participants. The Company informally funds plan benefits through the purchase of life insurance policies which are recorded in Other assets on the consolidated balance sheets. Participant deferrals are recorded in Other liabilities on the consolidated balance sheets. Employee salaries and non-employee directors’ fees deferred under the plan are charged to Salaries and employee benefits and Other operating expense, respectively, on the consolidated statements of income. Earnings on plan assets, net of benefits payable to plan participants, are reported in Salaries and employee benefits on the consolidated statements of income. The Company recorded net earnings of $0.1 million related to the deferred compensation plan for the three months ended March 31, 2015 and a net expense of $0.1 million for the three months ended March 31, 2014.

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Earnings per Common Share (Tables)

3 Months Ended

Mar. 31, 2015

Earnings per Common Share

Schedule of basic and diluted EPS

	For the three months ended March 31,
(in thousands, except per share amounts) (1)	2015		2014
Basic EPS:
Net income attributable to City National Corporation	$	61,566	$	53,830
Less: Dividends on preferred stock	4,094		4,094
Net income available to common shareholders	$	57,472	$	49,736
Less: Earnings allocated to participating securities	529		536
Earnings allocated to common shareholders	$	56,943	$	49,200
Weighted-average common shares outstanding	55,422		54,689
Basic earnings per common share	$	1.03	$	0.90
Diluted EPS:
Earnings allocated to common shareholders (2)	$	56,948	$	49,204
Weighted-average common shares outstanding	55,422		54,689
Dilutive effect of equity awards	884		740
Weighted-average diluted common shares outstanding	56,306		55,429
Diluted earnings per common share	$	1.01	$	0.89

(1) Certain prior period amounts have been adjusted to reflect the adoption of ASU 2014-01. See Note 1, Summary of Significant Accounting Policies, for further discussion.

(2) Earnings allocated to common shareholders for basic and diluted EPS may differ under the two-class method as a result of adding common stock equivalents for options to dilutive shares outstanding, which alters the ratio used to allocate earnings to common shareholders and participating securities for the purposes of calculating diluted EPS.

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Variable Interest Entities

3 Months Ended

Mar. 31, 2015

Variable Interest Entities

Variable Interest Entities

Note 16. Variable Interest Entities

The Company holds ownership interests in certain special-purpose entities formed to provide affordable housing. The Company evaluates its interest in these entities to determine whether they meet the definition of a VIE and whether the Company is required to consolidate these entities. The Company is not the primary beneficiary of the affordable housing VIEs in which it holds interests and is therefore not required to consolidate these entities. The investment in these entities is initially recorded at cost, which approximates the maximum exposure to loss as a result of the Company’s involvement with these unconsolidated entities. Subsequently, the carrying value is amortized over the stream of available tax credits and benefits. The Company expects to recover its investments over time, primarily through realization of federal low-income housing tax credits. The balance of the investments in these entities was $190.3 million and $186.4 million at March 31, 2015 and December 31, 2014, respectively, and is included in Affordable housing investments in the consolidated balance sheets. Unfunded commitments for affordable housing investments were $67.8 million at March 31, 2015. These unfunded commitments are recorded in Other liabilities in the consolidated balance sheets.

The Company also has ownership interests in several private equity and alternative investment funds that are VIEs. The Company is not a primary beneficiary and, therefore, is not required to consolidate these VIEs. The investment in these entities is carried at cost and net of impairments, which approximates the maximum exposure to loss as a result of the Company’s involvement with these entities. The Company expects to recover its investments over time, primarily through the allocation of fund income, gains or losses on the sale of fund assets, dividends or interest income. The balance in these entities was $29.2 million at March 31, 2015 and December 31, 2014, and is included in Other assets in the consolidated balance sheets. Income associated with these investments is reported in Other noninterest income in the consolidated statements of income.

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Share-Based Compensation (Detail 3) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Summary of changes in restricted stock and related information
Weighted-Average Grant Date Fair Value Granted (in dollars per share)	$ 90.46
Restricted stock
Summary of changes in restricted stock and related information
Unvested at the beginning of the period (in shares)	525,000
Granted (in shares)	99,000
Vested (in shares)	(130,406)	(164,938)
Forfeited (in shares)	(1,000)
Unvested at the end of the period (in shares)	493,000
Weighted-Average Grant Date Fair Value, beginning of the period (in dollars per share)	$ 60.60
Weighted-Average Grant Date Fair Value Granted (in dollars per share)	$ 90.46	$ 73.63
Weighted-Average Grant Date Fair Value Vested (in dollars per share)	$ 54.97
Weighted-Average Grant Date Fair Value Forfeited (in dollars per share)	$ 58.22
Weighted-Average Grant Date Fair Value, end of the period (in dollars per share)	$ 68.09
Total fair value of awards vested during the period	$ 7.2	$ 7.2
Unrecognized compensation cost	$ 19.9
Period for recognition of unrecognized compensation cost	3 years 6 months
Cash-settled restricted stock units
Summary of changes in restricted stock and related information
Unvested at the beginning of the period (in shares)	174,000
Granted (in shares)	14,000
Vested (in shares)	(43,000)
Forfeited (in shares)	(1,000)
Unvested at the end of the period (in shares)	144,000

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) In Thousands, except Share data, unless otherwise specified		Preferred stock	Common stock	Additional paid-in capital	Accumulated other comprehensive income (loss)	Retained earnings	Treasury shares	Total
Balance at Dec. 31, 2013 (As Reported)		$ 267,616	$ 54,667	$ 541,210	$ (15,641)	$ 1,918,163	$ (25,029)	$ 2,740,986
Balance at Dec. 31, 2013		267,616	54,667	541,210	(15,641)	1,906,222	(25,029)	2,729,045
Balance (in shares) at Dec. 31, 2013 (As Reported)			54,667,295
Balance (in shares) at Dec. 31, 2013			54,667,295
Increase (Decrease) in Stockholders' Equity
Net income	[1]					53,830		53,830
Other comprehensive income (loss), net of tax					11,278			11,278
Issuance of shares under share-based compensation plans			232	6,702			2,492	9,426
Issuance of shares under share-based compensation plans (in shares)			231,763
Share-based employee compensation expense				4,459				4,459
Tax benefit from share-based compensation plans				2,866				2,866
Dividends : Preferred						(4,094)		(4,094)
Dividends: Common						(18,224)		(18,224)
Net change in deferred compensation plans				181				181
Change in redeemable noncontrolling interest				(5,429)				(5,429)
Balance at Mar. 31, 2014		267,616	54,899	549,989	(4,363)	1,937,734	(22,537)	2,783,338
Balance (in shares) at Mar. 31, 2014			54,899,058
Balance at Dec. 31, 2012
Increase (Decrease) in Stockholders' Equity
Adjustment of initially apply Accounting Standards Update 2014-01						(11,941)		(11,941)
Balance at Dec. 31, 2013 (As Reported)		267,616	54,667	541,210	(15,641)	1,918,163	(25,029)	2,740,986
Balance at Dec. 31, 2013		267,616				1,906,222		2,729,045
Balance (in shares) at Dec. 31, 2013 (As Reported)			54,667,295
Balance at Dec. 31, 2014		267,616	55,162	578,046	(7,074)	2,071,230	(22,279)	2,942,701
Balance (in shares) at Dec. 31, 2014			55,162,455
Increase (Decrease) in Stockholders' Equity
Net income	[1]					61,566		61,566
Other comprehensive income (loss), net of tax					12,105			12,105
Issuance of shares under share-based compensation plans			348	14,459			3,536	18,343
Issuance of shares under share-based compensation plans (in shares)			347,596
Share-based employee compensation expense				4,252				4,252
Tax benefit from share-based compensation plans				3,211				3,211
Dividends : Preferred						(4,094)		(4,094)
Dividends: Common						(19,545)		(19,545)
Net change in deferred compensation plans				105			(1)	104
Net change in deferred compensation plans (in shares)			270
Change in redeemable noncontrolling interest				(273)				(273)
Balance at Mar. 31, 2015		$ 267,616	$ 55,510	$ 599,800	$ 5,031	$ 2,109,157	$ (18,744)	$ 3,018,370
Balance (in shares) at Mar. 31, 2015			55,510,321

[1] Net income excludes net income attributable to redeemable noncontrolling interest of $553 and $699 for the three month periods ended March 31, 2015 and 2014, respectively. Redeemable noncontrolling interest is reflected in the mezzanine section of the consolidated balance sheets. See Note 17 of the Notes to the Unaudited Consolidated Financial Statements.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
CONSOLIDATED BALANCE SHEETS
Securities available-for-sale, cost (in dollars)	$ 5,201,001	$ 5,894,509
Securities held-to-maturity, fair value (in dollars)	3,510,553	3,484,647
Other real estate owned, covered by FDIC loss share (in dollars)	$ 11,552	$ 12,760
Preferred stock, par value (in dollars per share)	$ 1.00	$ 1.00
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	275,000	275,000
Common stock, par value (in dollars per share)	$ 1.00	$ 1.00
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	55,510,321	55,162,455
Treasury shares	313,965	377,224

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Earnings per Common Share

3 Months Ended

Mar. 31, 2015

Earnings per Common Share

Earnings per Common Share

Note 9. Earnings per Common Share

The Company applies the two-class method of computing basic and diluted earnings per common share (“EPS”). Under the two-class method, EPS is determined for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The Company grants restricted stock and restricted stock units under a share-based compensation plan that qualify as participating securities.

The computation of basic and diluted EPS is presented in the following table:

	For the three months ended March 31,
(in thousands, except per share amounts) (1)	2015		2014
Basic EPS:
Net income attributable to City National Corporation	$	61,566	$	53,830
Less: Dividends on preferred stock	4,094		4,094
Net income available to common shareholders	$	57,472	$	49,736
Less: Earnings allocated to participating securities	529		536
Earnings allocated to common shareholders	$	56,943	$	49,200
Weighted-average common shares outstanding	55,422		54,689
Basic earnings per common share	$	1.03	$	0.90
Diluted EPS:
Earnings allocated to common shareholders (2)	$	56,948	$	49,204
Weighted-average common shares outstanding	55,422		54,689
Dilutive effect of equity awards	884		740
Weighted-average diluted common shares outstanding	56,306		55,429
Diluted earnings per common share	$	1.01	$	0.89

(1) Certain prior period amounts have been adjusted to reflect the adoption of ASU 2014-01. See Note 1, Summary of Significant Accounting Policies, for further discussion.

(2) Earnings allocated to common shareholders for basic and diluted EPS may differ under the two-class method as a result of adding common stock equivalents for options to dilutive shares outstanding, which alters the ratio used to allocate earnings to common shareholders and participating securities for the purposes of calculating diluted EPS.

The average price of the Company’s common stock for the period is used to determine the dilutive effect of outstanding stock options. Antidilutive stock options are not included in the calculation of diluted EPS. There were 0.2 million and 0.4 million average outstanding stock options that were antidilutive for the three months ended March 31, 2015 and 2014, respectively.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2015	Apr. 30, 2015
Document and Entity Information
Entity Registrant Name	CITY NATIONAL CORP
Entity Central Index Key	0000201461
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		55,605,256
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

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Share-Based Compensation

3 Months Ended

Mar. 31, 2015

Share-Based Compensation

Share-Based Compensation

Note 10. Share-Based Compensation

On March 31, 2015, the Company had one share-based compensation plan, the Amended and Restated City National Corporation 2008 Omnibus Plan (the “Plan”), which was originally approved by the Company’s shareholders on April 23, 2008. No new awards have been or will be granted under predecessor plans since the adoption of the Plan. The Plan permits the grant of stock options, restricted stock, restricted stock units, cash-settled restricted stock units, performance shares, performance share units, performance units and stock appreciation rights, or any combination thereof, to the Company’s eligible employees and non-employee directors. No grants of performance shares, performance share units or stock appreciation rights had been made as of March 31, 2015. At March 31, 2015, there were approximately 2.4 million shares available for future grants. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 for further discussion of the Company’s share-based compensation plan.

The compensation cost that has been recognized for all share-based awards was $6.2 million and $5.4 million for the three months ended March 31, 2015 and 2014, respectively. The total income tax benefit recognized in the consolidated statements of income for share-based compensation arrangements was $2.6 million and $2.3 million for the three months ended March 31, 2015 and 2014, respectively. The Company received $21.3 million and $13.2 million in cash for the exercise of stock options during the three months ended March 31, 2015 and 2014, respectively. The actual tax benefit realized for the tax deductions from stock option exercises was $3.4 million and $1.7 million for the three months ended March 31, 2015 and 2014, respectively.

To estimate the fair value of stock option awards, the Company uses the Black-Scholes methodology, which incorporates the assumptions summarized in the table below:

	For the three months ended March 31,
	2015		2014
Weighted-average volatility	26.66	%	27.35	%
Dividend yield	1.55	%	1.79	%
Expected term (in years)	6.06		6.07
Risk-free interest rate	1.78	%	1.99	%

Using the Black-Scholes methodology, the weighted-average grant-date fair values of options granted during the three months ended March 31, 2015 and 2014 were $21.80 and $17.94, respectively. The total intrinsic value of options exercised during the three months ended March 31, 2015 and 2014 was $8.2 million and $4.0 million, respectively.

A summary of option activity and related information for the three months ended March 31, 2015 is presented below:

			Weighted				Weighted
			Average		Aggregate		Average
	Number of		Exercise		Intrinsic		Remaining
	Shares		Price		Value		Contractual
Options	(in thousands)		(per share)		(in thousands) (1)		Term
Outstanding at January 1, 2015	3,971		$	57.40
Granted	374		90.46
Exercised	(332	)	64.25
Forfeited or expired	(10	)	66.36
Outstanding at March 31, 2015	4,003		$	59.90	$	117,325	5.77
Exercisable at March 31, 2015	2,850		$	55.34	$	96,155	4.58

(1) Includes in-the-money options only.

A summary of changes in unvested options and related information for the three months ended March 31, 2015 is presented below:

			Weighted Average
	Number of		Grant Date
	Shares		Fair Value
Unvested Options	(in thousands)		(per share)
Unvested at January 1, 2015	1,269		$	14.80
Granted	374		21.80
Vested	(488	)	14.82
Forfeited	(2	)	13.17
Unvested at March 31, 2015	1,153		$	17.07

The number of options vested during the three months ended March 31, 2015 and 2014 was 487,678 and 517,130, respectively. The total fair value of options vested during the three months ended March 31, 2015 and 2014 was $7.2 million and $7.5 million, respectively. As of March 31, 2015, there was $16.5 million of unrecognized compensation cost related to unvested stock options granted under the Company’s plans. That cost is expected to be recognized over a weighted-average period of 3.0 years.

A summary of changes in restricted stock and related information for the three months ended March 31, 2015 is presented below:

			Weighted Average
	Number of		Grant Date
	Shares		Fair Value
Restricted Stock (1)	(in thousands)		(per share)
Unvested at January 1, 2015	525		$	60.60
Granted	99		90.46
Vested	(130	)	54.97
Forfeited	(1	)	58.22
Unvested at March 31, 2015	493		$	68.09

(1) Includes restricted stock units.

Restricted stock is valued at the closing price of the Company’s stock on the date of award. The weighted-average grant-date fair value of restricted stock granted during the three months ended March 31, 2015 and 2014 was $90.46 and $73.63, respectively. The number of restricted shares vested during the three months ended March 31, 2015 and 2014 was 130,406 and 164,938, respectively. The total fair value of restricted stock vested was $7.2 million during the three months ended March 31, 2015 and 2014. As of March 31, 2015, the unrecognized compensation cost related to restricted stock granted under the Company’s plans was $19.9 million. That cost is expected to be recognized over a weighted-average period of 3.5 years.

Cash-settled restricted stock units are initially valued at the closing price of the Company’s stock on the date of award. They are subsequently remeasured to the closing price of the Company’s stock at each reporting date until settlement. A summary of changes in cash-settled restricted stock units for the three months ended March 31, 2015 is presented below:

	Number of
	Shares
Cash-Settled Restricted Stock Units	(in thousands)
Unvested at January 1, 2015	174
Granted	14
Vested	(43	)
Forfeited	(1	)
Unvested at March 31, 2015	144

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CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Interest Income
Loans and leases	$ 184,032	$ 169,696
Securities	42,072	41,576
Due from banks - interest-bearing	136	443
Federal funds sold and securities purchased under resale agreements	1,241	1,370
Total interest income	227,481	213,085
Interest Expense
Deposits	1,920	2,134
Federal funds purchased and securities sold under repurchase agreements	71
Subordinated debt	3,746	6,104
Other long-term debt	5,164	5,049
Total interest expense	10,901	13,287
Net interest income	216,580	199,798
Provision for losses on covered loans	497	4,655
Net interest income after provision	216,083	195,143
Noninterest Income
Trust and investment fees	55,521	53,306
Brokerage and mutual fund fees	10,598	10,042
Cash management and deposit transaction charges	12,633	12,033
International services	10,668	10,395
FDIC loss sharing expense, net	(6,688)	(7,083)
Gain on disposal of assets	110	2,826
Gain on sale of securities	3,376	2,122
Other	24,922	17,607
Impairment loss on securities:
Total other-than-temporary impairment loss on securities	(293)
Less: Portion of loss recognized in other comprehensive income	228	0
Net impairment loss recognized in earnings	(65)	0
Total noninterest income	111,075	101,248
Noninterest Expense
Salaries and employee benefits	144,568	136,833
Net occupancy of premises	16,073	16,094
Legal and professional fees	16,938	12,950
Information services	9,860	9,346
Depreciation and amortization	14,982	7,828
Amortization of intangibles	1,377	1,487
Marketing and advertising	8,830	9,775
Office services and equipment	5,136	4,910
Other real estate owned	2,731	1,433
FDIC assessments	5,094	1,391
Other operating	8,853	8,805
Total noninterest expense	234,442	210,852
Income before income taxes	92,716	85,539
Income taxes	30,597	31,010
Net income	62,119	54,529
Less: Net income attributable to noncontrolling interest	553	699
Net income attributable to City National Corporation	61,566	53,830
Less: Dividends on preferred stock	4,094	4,094
Net income available to common shareholders	$ 57,472	$ 49,736
Net income per common share, basic (in dollars per share)	$ 1.03	$ 0.90
Net income per common share, diluted (in dollars per share)	$ 1.01	$ 0.89
Weighted-average common shares outstanding, basic (in shares)	55,422	54,689
Weighted-average common shares outstanding, diluted (in shares)	56,306	55,429
Dividends per common share (in dollars per share)	$ 0.35	$ 0.33

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Other Investments

3 Months Ended

Mar. 31, 2015

Other Investments

Other Investments

Note 4. Other Investments

FHLB and FRB Stock

The Company’s investment in stock issued by the FHLB and FRB totaled $58.4 million at March 31, 2015 and December 31, 2014. Ownership of government agency securities is restricted to member banks, and the securities do not have readily determinable market values. The Company records investments in FHLB and FRB stock at cost in Other assets of the consolidated balance sheets and evaluates these investments for impairment. The Company expects to recover the full amount invested in FHLB and FRB stock.

Private Equity and Alternative Investments

The Company has ownership interests in a limited number of private equity, venture capital, real estate and hedge funds that are not publicly traded and do not have readily determinable fair values. These investments are carried at cost in the Other assets section of the consolidated balance sheets and are net of impairment write-downs, if applicable. The Company’s investments in these funds totaled $29.2 million at March 31, 2015 and December 31, 2014. A summary of investments by fund type is provided below:

(in thousands)	March 31,		December 31,
Fund Type	2015		2014
Private equity and venture capital	$	18,095	$	18,605
Real estate	7,320		7,081
Hedge	1,168		1,668
Other (1)	2,605		1,858
Total	$	29,188	$	29,212

(1) Includes direct investments in a limited number of start-up companies.

Management reviews these investments quarterly for impairment. The impairment assessment includes a review of the most recent financial statements and investment reports for each fund and discussions with fund management. An impairment loss is recognized if the Company does not expect to recover the cost of an investment. The impairment loss is recognized in Other noninterest income in the consolidated statements of income. The new cost basis of the investment is not adjusted for subsequent recoveries in value. The Company recognized $0.4 million in impairment losses on its investments during the three months ended March 31, 2015. The Company recognized no impairment losses on its investments during the three months ended March 31, 2014.

The table below provides information as of March 31, 2015 on private equity and alternative investments measured at fair value on a nonrecurring basis due to the recognition of impairment:

(in thousands) Fund Type	Fair Value		Unfunded Commitments		Redemption Frequency	Redemption Notice Period
Private equity and venture capital	$	328	$	179	None (1)	N/A
Other investments	750		—		None	N/A
Total	$	1,078	$	179

(1) Funds make periodic distributions of income but do not permit redemptions prior to the end of the investment term.

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Securities

3 Months Ended

Mar. 31, 2015

Securities

Securities

Note 3. Securities

At March 31, 2015, the Company had total securities of $8.73 billion, comprised of securities available-for-sale at fair value of $5.21 billion, securities held-to-maturity at amortized cost of $3.41 billion and trading securities at fair value of $102.5 million. At December 31, 2014, the Company had total securities of $9.48 billion, comprised of securities available-for-sale at fair value of $5.88 billion, securities held-to-maturity at amortized cost of $3.43 billion and trading securities at fair value of $173.2 million.

The following is a summary of amortized cost and estimated fair value for the major categories of securities available-for-sale and securities held-to-maturity at March 31, 2015 and December 31, 2014:

			Gross		Gross
	Amortized		Unrealized		Unrealized
(in thousands)	Cost		Gains		Losses			Fair Value
March 31, 2015
Securities available-for-sale:
U.S. Treasury	$	115,893	$	29	$	(15	)	$	115,907
Federal agency - Debt	1,219,481		1,168		(429		)	1,220,220
Federal agency - MBS	99,891		2,498		(874		)	101,515
CMOs - Federal agency	3,204,823		22,016		(21,953		)	3,204,886
CMOs - Non-agency	23,147		24		(360		)	22,811
State and municipal	421,419		6,257		(218		)	427,458
Other debt securities	115,006		1,438		(3		)	116,441
Total debt securities	5,199,660		33,430		(23,852		)	5,209,238
Equity securities and mutual funds	1,341		219		(410		)	1,150
Total securities available-for-sale	$	5,201,001	$	33,649	$	(24,262	)	$	5,210,388
Securities held-to-maturity (1):
Federal agency - Debt	$	286,581	$	9,923	$	(72	)	$	296,432
Federal agency - MBS	556,931		20,346		(567		)	576,710
CMOs - Federal agency	1,766,325		48,270		(2,749		)	1,811,846
State and municipal	717,937		23,084		(1,810		)	739,211
Other debt securities	86,032		322		—			86,354
Total securities held-to-maturity	$	3,413,806	$	101,945	$	(5,198	)	$	3,510,553
December 31, 2014
Securities available-for-sale:
U.S. Treasury	$	116,919	$	17	$	(10	)	$	116,926
Federal agency - Debt	1,401,303		558		(3,280		)	1,398,581
Federal agency - MBS	102,939		2,601		(1,014		)	104,526
CMOs - Federal agency	3,599,831		19,628		(38,869		)	3,580,590
CMOs - Non-agency	24,385		40		(411		)	24,014
State and municipal	473,272		6,139		(380		)	479,031
Other debt securities	174,352		1,817		—			176,169
Total debt securities	5,893,001		30,800		(43,964		)	5,879,837
Equity securities and mutual funds	1,508		1,988		(350		)	3,146
Total securities available-for-sale	$	5,894,509	$	32,788	$	(44,314	)	$	5,882,983
Securities held-to-maturity (1):
Federal agency - Debt	$	292,932	$	6,430	$	(255	)	$	299,107
Federal agency - MBS	553,589		13,427		(2,275		)	564,741
CMOs - Federal agency	1,811,574		29,998		(10,292		)	1,831,280
State and municipal	682,705		22,732		(1,997		)	703,440
Other debt securities	86,231		72		(224		)	86,079
Total securities held-to-maturity	$	3,427,031	$	72,659	$	(15,043	)	$	3,484,647

(1) Securities held-to-maturity are presented in the consolidated balance sheets at amortized cost. 

Proceeds from sales of securities available-for-sale were $398.2 million for the three months ended March 31, 2015, compared with $377.1 million for the three months ended March 31, 2014. There were no sales of securities held-to-maturity during the three months ended March 31, 2015 and 2014. The following table provides the gross realized gains and losses on the sales and calls of securities (including trading securities):

	For the three months ended
	March 31,
(in thousands)	2015			2014
Gross realized gains	$	3,392		$	2,602
Gross realized losses	(16		)	(480		)
Net realized gains	$	3,376		$	2,122

Interest income on securities for the three months ended March 31, 2015 and 2014 is comprised of: (i) taxable interest income of $35.0 million and $36.0 million, respectively, (ii) nontaxable interest income of $7.0 million and $5.5 million, respectively, and (iii) dividend income of $11 thousand and $9 thousand, respectively.

The following table provides the expected remaining maturities of debt securities included in the securities portfolio at March 31, 2015, except for maturities of mortgage-backed securities which are allocated according to the average life of expected cash flows. Average expected maturities will differ from contractual maturities because of the amortizing nature of the loan collateral and prepayment behavior of borrowers.

(in thousands)	One year or less		Over 1 year through 5 years		Over 5 years through 10 years		Over 10 years		Total
Securities available-for-sale:
U.S. Treasury	$	98,400	$	17,507	$	—	$	—	$	115,907
Federal agency - Debt	597,445		622,775		—		—		1,220,220
Federal agency - MBS	—		83,971		17,544		—		101,515
CMOs - Federal agency	157,341		3,047,545		—		—		3,204,886
CMOs - Non-agency	1,381		21,430		—		—		22,811
State and municipal	171,999		252,104		—		3,355		427,458
Other	57,142		59,299		—		—		116,441
Total debt securities available-for-sale	$	1,083,708	$	4,104,631	$	17,544	$	3,355	$	5,209,238
Amortized cost	$	1,081,124	$	4,097,536	$	17,600	$	3,400	$	5,199,660
Securities held-to-maturity:
Federal agency - Debt	$	—	$	—	$	132,829	$	153,752	$	286,581
Federal agency - MBS	—		49,153		503,264		4,514		556,931
CMOs - Federal agency	—		867,361		898,964		—		1,766,325
State and municipal	—		177,608		454,244		86,085		717,937
Other	—		86,032		—		—		86,032
Total debt securities held-to-maturity at amortized cost	$	—	$	1,180,154	$	1,989,301	$	244,351	$	3,413,806

Impairment Assessment

The Company performs a quarterly assessment of debt and equity securities in its investment portfolio to determine whether a decline in fair value below amortized cost is other-than-temporary. Amortized cost includes adjustments made to the cost of an investment for amortization, accretion, collection of cash and previous other-than-temporary impairment recognized in earnings. The Company’s impairment assessment of debt securities takes the following factors into consideration: the length of time and the extent to which the market value has been less than cost; the financial condition and near-term prospects of the issuer, including events specific to the issuer or industry; defaults or deferrals of scheduled interest and principal payments; external credit ratings; and whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. For equity securities, the evaluation of whether an impairment is other-than-temporary is based on whether and when an equity security will recover in value and whether the Company has the intent and ability to hold the equity security until the anticipated recovery in value occurs. If a decline in fair value is determined to be other-than-temporary, the cost basis of the individual security is written down to fair value which then becomes the security’s new cost basis. The new cost basis is not adjusted for subsequent recoveries in fair value.

Other-than-temporary impairment losses on equity securities are recognized in earnings. For debt securities, if the Company intends to sell an impaired security or it is more likely than not it will be required to sell a security prior to recovery of its amortized cost, an impairment loss is recognized in earnings for the entire difference between the amortized cost and fair value of the security on the measurement date. If the Company does not intend to sell the security or it is not more likely than not it will be required to sell the security prior to recovery of its amortized cost, the credit loss component of impairment is recognized in earnings. A credit loss is the difference between the amortized cost of the security and the present value of cash flows expected to be collected, discounted at the security’s effective interest rate at the date of acquisition. Impairment associated with factors other than credit, such as market liquidity, is recognized in other comprehensive income, net of tax.

Securities Deemed to be Other-Than-Temporarily Impaired

The Company recorded impairment losses in earnings on securities available-for-sale of $0.1 million for the three months ended March 31, 2015. There were no impairment losses recognized in earnings for the three months ended March 31, 2014. The Company recognized an after-tax amount of $0.1 million of non-credit-related other-than-temporary impairment in accumulated other comprehensive income or loss (“AOCI”) on securities classified as available-for-sale at March 31, 2015. There was no non-credit related other-than-temporary impairment recognized in AOCI on securities available-for-sale at March 31, 2014. No impairment losses were recognized in earnings or AOCI for securities held-to-maturity during the three months ended March 31, 2015 and 2014.

The following table summarizes the changes in cumulative credit-related other-than-temporary impairment recognized in earnings for debt securities for the three months ended March 31, 2015 and 2014. Credit-related other-than-temporary impairment that was recognized in earnings is reflected as an “Initial credit-related impairment” if the period reported is the first time the security had a credit impairment. A credit-related other-than-temporary impairment is reflected as a “Subsequent credit-related impairment” if the period reported is not the first time the security had a credit impairment. Cumulative impairment is reduced for securities with previously recognized credit-related impairment that were sold or redeemed during the period. Cumulative impairment is further adjusted for other changes in expected cash flows.

	For the three months ended
	March 31,
(in thousands)	2015		2014
Balance, beginning of period	$	2,470	$	4,549
Subsequent credit-related impairment	65		—
Balance, end of period	$	2,535	$	4,549

The following table provides a summary of the gross unrealized losses and fair value of investment securities that are not deemed to be other-than-temporarily impaired aggregated by investment category and length of time that the securities have been in a continuous unrealized loss position as of March 31, 2015 and December 31, 2014. The table also includes investment securities that had both a credit-related impairment recognized in earnings and a non-credit-related impairment recognized in AOCI.

	Less than 12 months				12 months or greater				Total
(in thousands)	Fair Value		Estimated Unrealized Loss		Fair Value		Estimated Unrealized Loss		Fair Value		Estimated Unrealized Loss
March 31, 2015
Securities available-for-sale:
U.S. Treasury	$	66,688	$	15	$	—	$	—	$	66,688	$	15
Federal agency - Debt	466,094		429		—		—		466,094		429
Federal agency - MBS	—		—		56,741		874		56,741		874
CMOs - Federal agency	549,307		1,652		1,195,370		20,301		1,744,677		21,953
CMOs - Non-agency	1,928		16		12,331		344		14,259		360
State and municipal	107,251		171		3,553		47		110,804		218
Other debt securities	12,609		3		—		—		12,609		3
Total debt securities	1,203,877		2,286		1,267,995		21,566		2,471,872		23,852
Equity securities and mutual funds	477		410		—		—		477		410
Total securities available-for-sale	$	1,204,354	$	2,696	$	1,267,995	$	21,566	$	2,472,349	$	24,262
Securities held-to-maturity:
Federal agency - Debt	$	—	$	—	$	5,950	$	72	$	5,950	$	72
Federal agency - MBS	34,532		81		40,762		486		75,294		567
CMOs - Federal agency	180,042		937		180,742		1,812		360,784		2,749
State and municipal	83,998		733		33,863		1,077		117,861		1,810
Total securities held-to-maturity	$	298,572	$	1,751	$	261,317	$	3,447	$	559,889	$	5,198
December 31, 2014
Securities available-for-sale:
U.S. Treasury	$	15,814	$	10	$	—	$	—	$	15,814	$	10
Federal agency - Debt	1,008,234		2,622		135,868		658		1,144,102		3,280
Federal agency - MBS	35		—		57,970		1,014		58,005		1,014
CMOs - Federal agency	871,026		3,417		1,261,695		35,452		2,132,721		38,869
CMOs - Non-agency	1,949		15		12,720		396		14,669		411
State and municipal	130,208		314		4,183		66		134,391		380
Total debt securities	2,027,266		6,378		1,472,436		37,586		3,499,702		43,964
Equity securities and mutual funds	538		350		—		—		538		350
Total securities available-for-sale	$	2,027,804	$	6,728	$	1,472,436	$	37,586	$	3,500,240	$	44,314
Securities held-to-maturity:
Federal agency - Debt	$	—	$	—	$	26,316	$	255	$	26,316	$	255
Federal agency - MBS	4,800		21		114,856		2,254		119,656		2,275
CMOs - Federal agency	202,014		2,247		588,019		8,045		790,033		10,292
State and municipal	14,851		76		95,647		1,921		110,498		1,997
Other debt securities	61,813		224		—		—		61,813		224
Total securities held-to-maturity	$	283,478	$	2,568	$	824,838	$	12,475	$	1,108,316	$	15,043

At March 31, 2015, the Company had securities available-for-sale with a fair value of $2.47 billion and securities held-to-maturity with a fair value of $559.9 million in an unrealized loss position. The debt securities in an unrealized loss position totaled 316 and included 2 U.S. Treasury notes, 12 federal agency debt securities, 17 federal agency MBS, 101 federal agency CMOs, 3 non-agency CMOs, 180 state and municipal securities and 1 other debt securities. At March 31, 2015, the Company had one equity security in an unrealized loss position.

At December 31, 2014, the Company had securities available-for-sale with a fair value of $3.50 billion and securities held-to-maturity with a fair value of $1.11 billion in an unrealized loss position. The debt securities in an unrealized loss position totaled 436 and included 2 U.S. Treasury notes, 37 federal agency debt securities, 23 federal agency MBS, 141 federal agency CMOs, 3 non-agency CMOs, 225 state and municipal securities and 5 other debt securities. At December 31, 2014, the Company had one equity security in an unrealized loss position.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies

Commitments and Contingencies

Note 15. Commitments and Contingencies

In the normal course of business, the Company issues financial guarantees in the form of letters of credit. Standby letters of credit are commitments issued by the Company to guarantee the obligations of its client to beneficiaries. Commercial letters of credit are issued on behalf of clients to ensure payment in connection with trade transactions. Exposure to credit loss in the event of nonperformance by the other party to the letters of credit is represented by the contractual notional amount. At March 31, 2015, the Company had $707.7 million outstanding in letters of credit, of which $589.3 million relate to standby letters of credit and $118.4 million relate to commercial letters of credit. The Company had $718.0 million outstanding in letters of credit at December 31, 2014, of which $607.6 million relate to standby letters of credit and $110.4 million relate to commercial letters of credit.

In connection with the liquidation of an investment acquired in a previous bank merger, the Company has an outstanding long-term indemnity. The maximum liability under the indemnity is $23.0 million, but the Company does not expect to make any payments of more than nominal amounts under the terms of this indemnity.

The Company entered into contingent consideration arrangements associated with its acquisition of Rochdale and the sale of its retirement services recordkeeping business. Contingent consideration represents additional purchase price consideration to be transferred from the acquirer to the seller if certain future events or conditions are met. See Note 2, Fair Value Measurements, for additional information about the contingent consideration asset and liability.

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Derivative Instruments

3 Months Ended

Mar. 31, 2015

Derivative Instruments

Derivative Financial Instruments

Note 11. Derivative Instruments

The Company may use interest-rate swaps to mitigate interest-rate risk associated with changes to (1) the fair value of certain fixed-rate deposits and borrowings (fair value hedges) and (2) certain cash flows related to future interest payments on variable rate loans (cash flow hedges). Interest-rate swap agreements involve the exchange of fixed and variable rate interest payments between counterparties based upon a notional principal amount and maturity date. The Company recognizes derivatives as assets or liabilities on the consolidated balance sheets at their fair value. The treatment of changes in the fair value of derivatives depends on the character of the transaction. The Company also offers various derivative products to clients and enters into derivative transactions in due course. These transactions are not linked to specific Company assets or liabilities in the consolidated balance sheets or to forecasted transactions in a hedge relationship and, therefore, do not qualify for hedge accounting.

The following table summarizes the fair value and balance sheet classification of derivative instruments as of March 31, 2015 and December 31, 2014. The notional amount of the contract is not recorded on the consolidated balance sheets, but is used as the basis for determining the amount of interest payments to be exchanged between the counterparties. If a counterparty fails to perform, the Company’s counterparty credit risk is equal to the amount reported as a derivative asset.

Notional Amounts and Fair Values of Derivative Instruments

	March 31, 2015						December 31, 2014
(in millions) (1)	Notional Amount		Derivative Assets		Derivative Liabilities		Notional Amount		Derivative Assets		Derivative Liabilities
Derivatives not designated as hedging instruments
Interest rate contracts:
Swaps	$	3,221.1	$	59.8	$	61.0	$	3,094.5	$	44.7	$	45.2
Interest-rate caps, floors and collars	438.9		0.4		0.4		437.3		0.8		0.8
Total interest-rate contracts	3,660.0		60.2		61.4		3,531.8		45.5		46.0
Option contracts	1.8		0.3		—		1.9		0.4		—
Foreign exchange contracts:
Spot and forward contracts	866.2		15.1		15.7		802.7		6.1		6.6
Options purchased	3.0		0.1		0.1		3.0		0.1		0.1
Options written	3.0		0.2		0.2		3.0		0.2		0.2
Total foreign exchange contracts	872.2		15.4		16.0		808.7		6.4		6.9
Equity warrants	3.2		1.2		—		2.3		0.9		—
Total derivatives not designated as hedging instruments	$	4,537.2	$	77.1	$	77.4	$	4,344.7	$	53.2	$	52.9

(1) The Company offsets mark-to-market adjustments, interest receivable, interest payable and cash collateral received on interest-rate swaps that are executed with the same counterparty under a master netting agreement, and reports the net balance in other assets or other liabilities in the consolidated balance sheets. For purposes of this disclosure, mark-to-market adjustments, interest receivable and interest payable are presented on a gross basis and cash collateral is excluded from fair value amounts.

Derivatives Designated as Hedging Instruments

The Company had no hedging instruments as of March 31, 2015 and December 31, 2014.

Derivatives Not Designated as Hedging Instruments

Derivative contracts not designated as hedges are composed primarily of interest-rate contracts with certain commercial clients that are largely offset by paired trades with unrelated bank counterparties. The Company also enters into foreign exchange contracts with its clients and counterparty banks primarily for the purpose of offsetting or hedging the clients’ transaction and economic exposures arising out of commercial transactions. The Company also obtains equity warrants in association with certain lending transactions. Derivative contracts not designated as hedges are carried at fair value each reporting period with changes in fair value recorded as a part of Noninterest income in the consolidated statements of income. The table below provides the amount of gains and losses on these derivative contracts for the three months ended March 31, 2015 and 2014:

(in millions)		For the three months ended
Derivatives Not Designated as	Location in Consolidated	March 31,
Hedging Instruments	Statements of Income	2015			2014
Interest-rate contracts	Other noninterest income	$	(0.7	)	$	(0.5	)
Option contracts	Other noninterest income	(0.1		)	0.1
Foreign exchange contracts (1)	International services income	7.5			7.2
Total income		$	6.7		$	6.8

(1)  Includes spread and translation gains (losses) on foreign exchange spot, forward and option contracts.

In the course of negotiating credit facilities, the Company may obtain rights to acquire stock in the form of equity warrants in primarily private, venture-backed technology companies. The warrants grant the Company an option to purchase a specific number of shares of stock in the underlying company at a specific price within a specific time period. The warrant agreements typically contain a net share settlement provision (cashless exercise) which gives the Company the option to receive at exercise a number of shares equal to the intrinsic value of the warrant divided by the share price. Equity warrants are accounted for as derivatives under ASC Topic 815, Derivatives and Hedging, and are recorded as derivative assets at their estimated fair value on the grant date. The warrant portfolio is reviewed quarterly for changes in fair value. Subsequent changes in the fair value of warrants are recognized in Other noninterest income in the consolidated statements of income. If a warrant is exercised or paid out for cash, the gain is recorded in Other noninterest income in the consolidated statements of income.

Credit Risk Exposure and Collateral

The Company’s swap agreements require the deposit of cash or marketable debt securities as collateral based on certain risk thresholds. These requirements apply individually to the Corporation and to the Bank. Additionally, certain of the Company’s swap contracts contain security agreements that include credit-risk-related contingent features. Under these agreements, the collateral requirements are based on the Company’s credit rating from the major credit rating agencies. The amount of collateral required may vary by counterparty based on a range of credit ratings that correspond with exposure thresholds established in the derivative agreements. If the credit ratings on the Company’s debt were to fall below the level associated with a particular exposure threshold and the derivatives with a counterparty are in a net liability position that exceeds that threshold, the counterparty could request immediate payment or delivery of collateral for the difference between the net liability amount and the exposure threshold. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position on March 31, 2015 was $23.7 million. The Company delivered collateral in the form of securities valued at $14.5 million and cash totaling $41.4 million on swap agreements that had credit-risk-related contingent features and were in a net liability position at March 31, 2015.

The Company’s interest-rate swaps had no credit risk exposure at March 31, 2015 and December 31, 2014, respectively. The credit exposure represents the cost to replace, on a present value basis and at current market rates, all contracts by trading counterparty having an aggregate positive market value, net of margin collateral received. The Company enters into master netting agreements with swap counterparties to mitigate credit risk. Under these agreements, the net amount due from or payable to each counterparty is settled on the contract payment date. No collateral had been received from swap counterparties at March 31, 2015 and December 31, 2014. The Company delivered collateral valued at $6.6 million on swap agreements that did not have credit-risk-related contingent features at March 31, 2015.

At March 31, 2015 the Company had delivered and received cash collateral on foreign exchange contracts totaling $2.1 million and $1.9 million, respectively.

See Note 12, Balance Sheet Offsetting, of the Notes to the Unaudited Consolidated Financial Statements for additional information about the Company’s derivative instruments subject to master netting agreements.

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Borrowed Funds

3 Months Ended

Mar. 31, 2015

Borrowed Funds

Borrowed Funds

Note 7. Borrowed Funds

Short-term borrowings consist of funds with remaining maturities of one year or less, and long-term debt consists of borrowings with remaining maturities greater than one year. The components of short-term borrowings and long-term debt as of March 31, 2015 and December 31, 2014 are provided below:

	March 31,		December 31,
(in thousands) (1)	2015		2014
Short-term borrowings
Federal funds purchased	$	—	$	320,000
Current portion of nonrecourse debt (2)	4,400		2,861
Total short-term borrowings	$	4,400	$	322,861
Long-term debt
Senior notes:
City National Corporation - 5.25% Senior Notes Due September 2020	$	299,559	$	299,540
Subordinated debt:
City National Bank - 9.00% Subordinated Notes Due August 2019	75,000		75,000
City National Bank - 5.375% Subordinated Notes Due July 2022	149,995		149,994
Junior subordinated debt:
Floating Rate Business Bancorp Capital Trust I Securities due November 2034 (3)	5,155		5,155
Nonrecourse debt (2)	94,997		99,139
Other long-term debt (4)	9,719		9,772
Total long-term debt	$	634,425	$	638,600

(1) The carrying value of certain borrowed funds is net of discount which is being amortized into interest expense.

(2) Nonrecourse debt bears interest at an average rate of 3.88 percent as of March 31, 2015 and has maturity dates ranging from June 2015 to February 2023.

(3) These floating rate securities bear interest of three-month LIBOR plus 1.965 percent which is reset quarterly.  As of
March 31, 2015, the interest rate was approximately 2.23 percent.

(4) Other long-term debt includes a note payable that bears a fixed interest rate of 5.64 percent and is scheduled to mature in
June 2017.

The Company holds debt affiliated with First American Equipment Finance (“FAEF”), its wholly-owned equipment finance subsidiary. FAEF assigns the future rentals of certain lease financing loans to financial institutions on a nonrecourse basis at fixed interest rates. In return for future minimum lease rentals assigned, FAEF receives a discounted cash payment. Proceeds from discounting are reflected in the table above as nonrecourse debt.

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Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail 8) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014
Past Due Loans and Leases
30-59 Days Past Due	$ 5,224	$ 9,800
60-89 Days Past Due	10,591	2,103
Greater Than 90 Days and Accruing	1,028	1,515
Nonaccrual	33,376	42,167
Total Past Due and Nonaccrual Loans	50,219	55,585
Current	20,860,136	20,281,621
Total Loans and Leases	20,910,355	20,337,206	17,751,385
Commercial
Past Due Loans and Leases
30-59 Days Past Due	4,130	8,462
60-89 Days Past Due	5,586	325
Greater Than 90 Days and Accruing		148
Nonaccrual	8,192	15,096
Total Past Due and Nonaccrual Loans	17,908	24,031
Current	9,437,713	9,336,945
Total Loans and Leases	9,455,621	9,360,976
Commercial real estate mortgages
Past Due Loans and Leases
30-59 Days Past Due	185	693
Nonaccrual	2,901	3,575
Total Past Due and Nonaccrual Loans	3,086	4,268
Current	3,734,051	3,535,435
Total Loans and Leases	3,737,137	3,539,703	3,280,868
Residential mortgages
Past Due Loans and Leases
60-89 Days Past Due	4,603	1,474
Greater Than 90 Days and Accruing	379	921
Nonaccrual	12,132	11,943
Total Past Due and Nonaccrual Loans	17,114	14,338
Current	5,282,833	5,092,465
Total Loans and Leases	5,299,947	5,106,803	4,682,055
Fixed
Past Due Loans and Leases
60-89 Days Past Due	618	309
Greater Than 90 Days and Accruing	379	921
Nonaccrual	10,793	10,365
Total Past Due and Nonaccrual Loans	11,790	11,595
Current	1,466,330	1,390,357
Total Loans and Leases	1,478,120	1,401,952
Variable
Past Due Loans and Leases
60-89 Days Past Due	3,985	1,165
Nonaccrual	1,339	1,578
Total Past Due and Nonaccrual Loans	5,324	2,743
Current	3,816,503	3,702,108
Total Loans and Leases	3,821,827	3,704,851
Real estate construction
Past Due Loans and Leases
Nonaccrual	6,598	6,598
Total Past Due and Nonaccrual Loans	6,598	6,598
Current	787,676	703,626
Total Loans and Leases	794,274	710,224	389,188
Construction
Past Due Loans and Leases
Current	766,840	686,990
Total Loans and Leases	766,840	686,990
Land.
Past Due Loans and Leases
Nonaccrual	6,598	6,598
Total Past Due and Nonaccrual Loans	6,598	6,598
Current	20,836	16,636
Total Loans and Leases	27,434	23,234
Home equity loans and lines of credit
Past Due Loans and Leases
60-89 Days Past Due	350	39
Greater Than 90 Days and Accruing	240	100
Nonaccrual	3,507	4,864
Total Past Due and Nonaccrual Loans	4,097	5,003
Current	787,634	780,793
Total Loans and Leases	791,731	785,796	691,338
Installment
Past Due Loans and Leases
30-59 Days Past Due	206	324
60-89 Days Past Due	52	113
Greater Than 90 Days and Accruing	409	346
Nonaccrual	39	84
Total Past Due and Nonaccrual Loans	706	867
Current	185,370	183,746
Total Loans and Leases	186,076	184,613	150,895
Commercial Installment loan
Past Due Loans and Leases
Current	249	298
Total Loans and Leases	249	298
Consumer Installment loan
Past Due Loans and Leases
30-59 Days Past Due	206	324
60-89 Days Past Due	52	113
Greater Than 90 Days and Accruing	409	346
Nonaccrual	39	84
Total Past Due and Nonaccrual Loans	706	867
Current	185,121	183,448
Total Loans and Leases	185,827	184,315
Lease financing
Past Due Loans and Leases
30-59 Days Past Due	703	321
60-89 Days Past Due		152
Nonaccrual	7	7
Total Past Due and Nonaccrual Loans	710	480
Current	644,859	648,611
Total Loans and Leases	$ 645,569	$ 649,091

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Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments

3 Months Ended

Mar. 31, 2015

Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments

Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments

Note 5. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments

The following is a summary of the major categories of loans:

Loans and Leases

	March 31,			December 31,
(in thousands)	2015			2014
Commercial	$	9,455,621		$	9,360,976
Commercial real estate mortgages	3,737,137			3,539,703
Residential mortgages	5,299,947			5,106,803
Real estate construction	794,274			710,224
Home equity loans and lines of credit	791,731			785,796
Installment	186,076			184,613
Lease financing	645,569			649,091
Loans and leases, excluding covered loans	20,910,355			20,337,206
Less: Allowance for loan and lease losses	(308,858		)	(310,149		)
Loans and leases, excluding covered loans, net	20,601,497			20,027,057
Covered loans	480,236			510,979
Less: Allowance for loan losses	(9,752		)	(8,608		)
Covered loans, net	470,484			502,371
Total loans and leases	$	21,390,591		$	20,848,185
Total loans and leases, net	$	21,071,981		$	20,529,428

The loan amounts above include unamortized fees, net of deferred costs, of $0.1 million as of March 31, 2015 and deferred costs, net of unamortized fees, of $0.2 million as of December 31, 2014.

Concentrations of credit risk arise when a number of clients are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company’s lending activities are predominantly in California, and to a lesser extent, New York, the Company has various specialty lending businesses that lend to businesses located throughout the United States of America and in certain foreign countries to facilitate trade finance activities. Excluding covered loans, at March 31, 2015, California represented 73 percent of total loans outstanding and New York represented 9 percent. The remaining 18 percent of total loans outstanding represented other states and countries. Although the Company has a diversified loan portfolio, a substantial portion of the loan portfolio and credit performance depends on the economic stability of Southern California. Credit performance also depends, to a lesser extent, on economic conditions in the San Francisco Bay area and New York.

Within the Company’s covered loan portfolio at March 31, 2015, the five states with the largest concentration were California (32 percent), Texas (12 percent), Nevada (6 percent), Arizona (6 percent) and Ohio (6 percent). The remaining 38 percent of total covered loans outstanding represented other states.

Covered Loans

Covered loans represent loans acquired from the FDIC that are subject to loss-sharing agreements. Covered loans were $480.2 million at March 31, 2015 and $511.0 million at December 31, 2014. Covered loans, net of allowance for loan losses, were $470.5 million at March 31, 2015 and $502.4 million at December 31, 2014.

The following is a summary of the major categories of covered loans:

	March 31,			December 31,
(in thousands)	2015			2014
Commercial	$	2,153		$	1,969
Commercial real estate mortgages	453,647			481,689
Residential mortgages	3,715			4,455
Real estate construction	16,813			18,790
Home equity loans and lines of credit	3,655			3,820
Installment	253			256
Covered loans	480,236			510,979
Less: Allowance for loan losses	(9,752		)	(8,608		)
Covered loans, net	$	470,484		$	502,371

The following table provides information on covered loans and loss-sharing terms by acquired entity:

(in thousands)	Imperial Capital Bank		1st Pacific Bank		Sun West Bank		Nevada Commerce Bank		Total
Carrying value of covered loans as of:
March 31, 2015	$	429,570	$	22,787	$	8,497	$	19,382	$	480,236
December 31, 2014	456,177		23,895		9,353		21,554		510,979
As of March 31, 2015:
FDIC indemnification asset	$	38,935	$	1,596	$	276	$	2,449	$	43,256
FDIC clawback liability	—		13,159		2,599		205		15,963
Expiration date of FDIC loss sharing:
Commercial (1)	12/31/2016		6/30/2015		6/30/2015		6/30/2016
Residential	12/31/2019		5/31/2020		5/31/2020		4/30/2021
Termination date of FDIC loss-sharing agreements:
Commercial (1)	12/19/2017		5/8/2018		5/29/2018		6/30/2019
Residential	12/31/2019		5/31/2020		5/31/2020		4/30/2021

(1) The Company is subject to sharing 80 percent of its recoveries with the FDIC up to the last day of the quarter in which the termination dates of the commercial loss-sharing agreements occur.

The Company evaluated the acquired loans from its FDIC-assisted acquisitions and concluded that all loans, with the exception of a small population of acquired loans, would be accounted for under Accounting Standards Codification (“ASC”) Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“ASC 310-30”). Loans are accounted for under ASC 310-30 when there is evidence of credit deterioration since origination and for which it is probable, at acquisition, that the Company would be unable to collect all contractually required payments. Interest income is recognized on all acquired impaired loans through accretion of the difference between the carrying amount of the loans and their expected cash flows.

The excess of cash flows expected to be collected over the carrying value of the underlying acquired impaired loans is referred to as the accretable yield. This amount is not reported in the consolidated balance sheets but is accreted into interest income over the remaining estimated lives of the underlying pools of loans. Changes in the accretable yield for acquired impaired loans were as follows for the three months ended March 31, 2015 and 2014:

	For the three months ended March 31,
(in thousands)	2015			2014
Balance, beginning of period	$	168,469		$	219,018
Accretion	(9,876		)	(12,528		)
Reclassifications from nonaccretable difference	4,816			4,305
Disposals and other	(8,853		)	(8,704		)
Balance, end of period	$	154,556		$	202,091

The factors that most significantly affect estimates of cash flows expected to be collected, and accordingly the accretable yield balance, include: (i) changes in credit assumptions, including both credit loss amounts and timing; (ii) changes in prepayment assumptions; and (iii) changes in interest rates for variable-rate loans. Reclassifications between accretable yield and nonaccretable difference may vary from period to period as the Company periodically updates its cash flow projections. The reclassification of nonaccretable difference to accretable yield during 2015 was principally driven by positive changes in cash flows, resulting mainly from changes in credit assumptions.

The Company recorded an indemnification asset related to its FDIC-assisted acquisitions, which represents the present value of the expected reimbursement from the FDIC for expected losses on acquired loans, OREO and unfunded commitments. The difference between the carrying value of the FDIC indemnification asset and the undiscounted cash flow that the Company expects to collect from the FDIC is accreted or amortized into noninterest income up until the expiration date of the FDIC loss sharing. Refer to the preceding table for a list of expiration dates of FDIC loss sharing by acquired entity. The FDIC indemnification asset is reviewed on a quarterly basis and adjusted based on changes in cash flow projections. The FDIC indemnification asset from all FDIC-assisted acquisitions was $43.3 million at March 31, 2015 and $50.5 million at December 31, 2014.

Credit Quality on Loans and Leases, Excluding Covered Loans

Allowance for Loan and Lease Losses and Reserve for Off-Balance Sheet Credit Commitments

The Company accounts for the credit risk associated with lending activities through its allowance for loan and lease losses, reserve for off-balance sheet credit commitments and provision for credit losses. The provision is the expense recognized in the consolidated statements of income to adjust the allowance and reserve to the levels deemed appropriate by management, as determined through application of the Company’s allowance methodology. The provision for credit losses reflects management’s judgment of the adequacy of the allowance for loan and lease losses and the reserve for off-balance sheet credit commitments. It is determined through quarterly analytical reviews of the loan and commitment portfolios and consideration of such other factors as the Company’s loan and lease loss experience, trends in problem loans, concentrations of credit risk, underlying collateral values, and current economic conditions, as well as the results of the Company’s ongoing credit review process. As conditions change, the Company’s level of provisioning and the allowance for loan and lease losses and reserve for off-balance sheet credit commitments may change.

The relative significance of risk considerations used in measuring the allowance for loan and lease losses will vary by portfolio segment. For commercial loans, the primary risk consideration is a borrower’s ability to generate sufficient cash flows to repay their loan. Secondary considerations include the creditworthiness of guarantors and the valuation of collateral. In addition to the creditworthiness of a borrower, the type and location of real estate collateral is an important risk factor for commercial real estate and real estate construction loans. The primary risk considerations for consumer loans are a borrower’s personal cash flow and liquidity, as well as collateral value.

For commercial, non-homogenous loans that are not impaired, the Company derives loss factors for each risk grade and loan type via a process that begins with estimates of probable losses inherent in the portfolio based upon various statistical analyses. The factors considered in the analysis include loan type, migration analysis, in which historical delinquency and credit loss experience is applied to the portfolio, as well as analyses that reflect current trends and conditions. Each portfolio of smaller balance homogeneous loans, including residential first mortgages, installment, revolving credit and most other consumer loans, is collectively evaluated for loss potential. The quantitative portion of the allowance for loan and lease losses is adjusted for qualitative factors to account for model imprecision and to incorporate the range of probable outcomes inherent in the estimates used for the allowance. The Company has a qualitative factor matrix to determine the amount of reserves needed for judgmental factors that are not attributable to or reflected in the quantitative model. The methodology to determine the qualitative reserves includes segmenting the Company’s portfolio into three loan categories: commercial real estate secured, commercial and consumer. The qualitative reserve factors are separated into numerically informed and judgmental categories. Numerically informed factors are linked to defined macroeconomic or bank specific criteria, such as portfolio growth, problem loan trends and concentrations. Judgmental factors are based on the Company’s assessment of factors that include, but are not limited to, the legal and regulatory environment, internal systems and procedures, and entry into a new business. Each factor is assigned a risk level and a risk weight in points which is aggregated to determine the level of qualitative reserves. The factors are updated quarterly to reflect changing conditions.

A portion of the allowance for loan and lease losses is attributed to impaired loans that are individually measured for impairment. This measurement is based on the present value of expected future cash flows discounted using the loan’s contractual effective rate, the fair value of collateral or the secondary market value of the loan.

The allowance for loan and lease losses is decreased by the amount of charge-offs and increased by the amount of recoveries. Generally, commercial, commercial real estate and real estate construction loans are charged off immediately when it is determined that advances to the borrower are in excess of the calculated current fair value of the collateral and if a borrower is deemed incapable of repayment of unsecured debt, there is little or no prospect for near term improvement and no realistic strengthening action of significance pending. Consumer loans are charged off based on delinquency, ranging from 60 days for overdrafts to 180 days for secured consumer loans, or earlier when it is determined that the loan is uncollectible due to a triggering event, such as bankruptcy, fraud or death.

The following is a summary of activity in the allowance for loan and lease losses and period-end recorded investment balances of loans evaluated for impairment, excluding covered loans, for the three months ended March 31, 2015 and 2014. Activity is provided by loan portfolio segment which is consistent with the Company’s methodology for determining the allowance for loan and lease losses.

(in thousands)	Commercial (1)			Commercial Real Estate Mortgages			Residential Mortgages			Real Estate Construction			Home Equity Loans and Lines of Credit			Installment			Qualitative			Total
Three months ended March 31, 2015
Allowance for loan and lease losses:
Beginning balance	$	115,855		$	44,745		$	10,296		$	9,115		$	6,609		$	2,228		$	121,301		$	310,149
Charge-offs	(2,825		)	—			—			—			—			(277		)	—			(3,102		)
Recoveries	1,116			1,160			39			87			38			220			—			2,660
Net (charge-offs) recoveries	(1,709		)	1,160			39			87			38			(57		)	—			(442		)
(Reversal of) provision for credit losses	6,520			1,112			(368		)	1,032			(286		)	(18		)	(7,992		)	—
Transfers to reserve for off-balance sheet credit commitments	—			—			—			—			—			—			(849		)	(849		)
Ending balance	$	120,666		$	47,017		$	9,967		$	10,234		$	6,361		$	2,153		$	112,460		$	308,858
Ending balance of allowance:
Individually evaluated for impairment	$	471		$	273		$	40		$	—		$	—		$	—		$	—		$	784
Collectively evaluated for impairment	120,195			46,744			9,927			10,234			6,361			2,153			112,460			308,074
Loans and leases, excluding covered loans
Ending balance of loans and leases:
Loans and leases, excluding covered loans	$	10,101,190		$	3,737,137		$	5,299,947		$	794,274		$	791,731		$	186,076		$	—		$	20,910,355
Individually evaluated for impairment	7,600			22,879			11,655			8,979			935			—			—			52,048
Collectively evaluated for impairment	10,093,590			3,714,258			5,288,292			785,295			790,796			186,076			—			20,858,307
Three months ended March 31, 2014
Allowance for loan and lease losses:
Beginning balance	$	117,103		$	50,678		$	11,540		$	6,351		$	6,677		$	1,842		$	108,393		$	302,584
Charge-offs	(1,959		)	(5		)	(482		)	—			(16		)	(46		)	—			(2,508		)
Recoveries	1,732			100			35			4,388			159			264			—			6,678
Net (charge-offs) recoveries	(227		)	95			(447		)	4,388			143			218			—			4,170
(Reversal of) provision for credit losses	4,698			588			502			(4,271		)	(401		)	(236		)	(880		)	—
Transfers to reserve for off-balance sheet credit commitments	—			—			—			—			—			—			(964		)	(964		)
Ending balance	$	121,574		$	51,361		$	11,595		$	6,468		$	6,419		$	1,824		$	106,549		$	305,790
Ending balance of allowance:
Individually evaluated for impairment	$	2,557		$	300		$	—		$	—		$	—		$	—		$	—		$	2,857
Collectively evaluated for impairment	119,017			51,061			11,595			6,468			6,419			1,824			106,549			302,933
Loans and leases, excluding covered loans
Ending balance of loans and leases:
Loans and leases, excluding covered loans	$	8,557,041		$	3,280,868		$	4,682,055		$	389,188		$	691,338		$	150,895		$	—		$	17,751,385
Individually evaluated for impairment	28,683			41,924			7,904			18,788			3,447			—			—			100,746
Collectively evaluated for impairment	8,528,358			3,238,944			4,674,151			370,400			687,891			150,895			—			17,650,639

(1) Includes lease financing loans.

Off-balance sheet credit exposures include loan commitments and letters of credit. The following table provides a summary of activity in the reserve for off-balance sheet credit commitments for the three months ended March 31, 2015 and 2014:

	For the three months ended March 31,
(in thousands)	2015		2014
Balance, beginning of period	$	27,811	$	33,944
Transfers from allowance for loan and lease losses	849		964
Balance, end of period	$	28,660	$	34,908

The reserve for off-balance sheet credit commitments increased $0.8 million during the three months ended March 31, 2015. The increase was due to normal fluctuations in the amount of reserves required due to changes in the composition, amount and quality of risk ratings of borrowers associated with the off-balance sheet commitments. Increases and decreases in the reserve for off-balance sheet credit commitments are reflected as an allocation of provision expense from or to the allowance for loan and lease losses.

Impaired Loans and Leases

The Company considers a loan to be impaired when it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan agreement. Once a loan is determined to be impaired, the impairment is measured based on the present value of the expected future cash flows discounted at the loan’s effective interest rate, except that if the loan is collateral dependent, the impairment is measured by using the fair value of the loan’s collateral. As a final alternative, the observable market price of the debt may be used to assess impairment. Nonperforming loans greater than $1 million are individually evaluated for impairment based upon the borrower’s overall financial condition, resources, and payment record, and the prospects for support from any financially responsible guarantors. For borrowers with multiple loans totaling $1 million or more, this threshold is applied at the total relationship level. Loans under $1 million are measured for impairment using historical loss factors. When the measurement of the impaired loan is less than the recorded amount of the loan, an impairment is recognized by creating a valuation allowance with a corresponding charge to the allowance for loan and lease losses or by adjusting an existing valuation allowance for the impaired loan.

Information on impaired loans, excluding covered loans, at March 31, 2015, December 31, 2014 and March 31, 2014 is provided in the following tables:

			Unpaid				For the three months ended March 31, 2015
(in thousands)	Recorded Investment		Contractual Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
March 31, 2015
With no related allowance recorded:
Commercial	$	1,449	$	1,637	$	—	$	5,172	$	5
Commercial real estate mortgages	17,838		18,762		—		18,848		208
Residential mortgages:
Fixed	7,720		7,980		—		7,738		10
Variable	—		—		—		112		—
Total residential mortgages	7,720		7,980		—		7,850		10
Real estate construction:
Land	8,979		11,119		—		7,794		62
Total real estate construction	8,979		11,119		—		7,794		62
Home equity loans and lines of credit	935		2,043		—		1,602		—
Total with no related allowance	$	36,921	$	41,541	$	—	$	41,266	$	285
With an allowance recorded:
Commercial	$	6,151	$	11,425	$	471	$	6,310	$	17
Commercial real estate mortgages	5,041		5,375		273		5,113		71
Residential mortgages:
Variable	3,935		3,926		40		3,946		26
Total residential mortgages	3,935		3,926		40		3,946		26
Total with an allowance	$	15,127	$	20,726	$	784	$	15,369	$	114
Total impaired loans by type:
Commercial	$	7,600	$	13,062	$	471	$	11,482	$	22
Commercial real estate mortgages	22,879		24,137		273		23,961		279
Residential mortgages	11,655		11,906		40		11,796		36
Real estate construction	8,979		11,119		—		7,794		62
Home equity loans and lines of credit	935		2,043		—		1,602		—
Total impaired loans	$	52,048	$	62,267	$	784	$	56,635	$	399

(in thousands)	Recorded Investment		Unpaid Contractual Principal Balance		Related Allowance
December 31, 2014
With no related allowance recorded:
Commercial	$	8,894	$	9,182	$	—
Commercial real estate mortgages	19,858		22,416		—
Residential mortgages:
Fixed	7,756		7,994		—
Variable	224		262		—
Total residential mortgages	7,980		8,256		—
Real estate construction:
Land	6,609		8,758		—
Total real estate construction	6,609		8,758		—
Home equity loans and lines of credit	2,270		3,375		—
Total with no related allowance	$	45,611	$	51,987	$	—
With an allowance recorded:
Commercial	$	6,470	$	8,878	$	399
Commercial real estate mortgages	5,184		5,526		281
Residential mortgages:
Variable	3,957		3,948		48
Total residential mortgages	3,957		3,948		48
Total with an allowance	$	15,611	$	18,352	$	728
Total impaired loans by type:
Commercial	$	15,364	$	18,060	$	399
Commercial real estate mortgages	25,042		27,942		281
Residential mortgages	11,937		12,204		48
Real estate construction	6,609		8,758		—
Home equity loans and lines of credit	2,270		3,375		—
Total impaired loans	$	61,222	$	70,339	$	728

			Unpaid				For the three months ended March 31, 2014
(in thousands)	Recorded Investment		Contractual Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
March 31, 2014
With no related allowance recorded:
Commercial	$	11,257	$	11,920	$	—	$	14,489	$	137
Commercial real estate mortgages	36,562		39,660		—		34,666		438
Residential mortgages:
Fixed	4,888		5,051		—		3,512		10
Variable	3,016		3,618		—		4,209		14
Total residential mortgages	7,904		8,669		—		7,721		24
Real estate construction:
Construction	5,484		6,766		—		5,484		55
Land	13,304		26,800		—		13,458		34
Total real estate construction	18,788		33,566		—		18,942		89
Home equity loans and lines of credit	3,447		4,505		—		2,888		—
Installment:
Consumer	—		—		—		8		—
Total installment	—		—		—		8		—
Total with no related allowance	$	77,958	$	98,320	$	—	$	78,714	$	688
With an allowance recorded:
Commercial	$	17,426	$	19,663	$	2,557	$	15,781	$	—
Commercial real estate mortgages	5,362		5,734		300		5,373		44
Residential mortgages:
Variable	—		—		—		837		—
Total residential mortgages	—		—		—		837		—
Total with an allowance	$	22,788	$	25,397	$	2,857	$	21,991	$	44
Total impaired loans by type:
Commercial	$	28,683	$	31,583	$	2,557	$	30,270	$	137
Commercial real estate mortgages	41,924		45,394		300		40,039		482
Residential mortgages	7,904		8,669		—		8,558		24
Real estate construction	18,788		33,566		—		18,942		89
Home equity loans and lines of credit	3,447		4,505		—		2,888		—
Installment	—		—		—		8		—
Total impaired loans	$	100,746	$	123,717	$	2,857	$	100,705	$	732

Impaired loans at March 31, 2015 and December 31, 2014 included $28.9 million and $30.6 million, respectively, of loans that are on accrual status. With the exception of restructured loans on accrual status and a limited number of loans on cash basis nonaccrual for which the full collection of principal and interest is expected, interest income is not recognized on impaired loans until the principal balance of these loans is paid off.

Troubled Debt Restructured Loans

The following table provides a summary of loans modified in a troubled debt restructuring during the three months ended March 31, 2015 and 2014:

(in thousands)	Number of Contracts	Pre-Modification Outstanding Principal		Period-End Outstanding Principal		Financial Effects (1)
Three months ended March 31, 2015
Home equity loans and lines of credit	1	$	87	$	85	$	—
Total troubled debt restructured loans	1	$	87	$	85	$	—
Three months ended March 31, 2014
Commercial	2	$	4,098	$	4,071	$	—
Residential mortgages:
Variable	1	676		676		—
Total troubled debt restructured loans	3	$	4,774	$	4,747	$	—

(1) Financial effects are comprised of charge-offs and specific reserves recognized on troubled debt restructured (“TDR”) loans at modification date.

A restructuring constitutes a troubled debt restructuring when a lender, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. Loans with pre-modification outstanding balances totaling $0.1 million and $4.8 million were modified in troubled debt restructurings during the three months ended March 31, 2015 and 2014, respectively.

The unpaid principal balance of TDR loans was $30.0 million, before specific reserves of $0.8 million, at March 31, 2015 and $34.3 million, before specific reserves of $0.7 million, at December 31, 2014. The net decrease in TDR loans from December 31, 2014 was primarily attributable to a $2.6 million charge-off on an existing TDR loan and payoffs and payments received on existing TDR loans totaling $1.8 million. These decreases were partially offset by additions totaling $0.1 million. Loans modified in troubled debt restructurings are impaired loans at the time of restructuring and subject to the same measurement criteria as all other impaired loans.

The following table provides a summary of TDR loans that subsequently defaulted during the three months ended March 31, 2015 that had been modified as a troubled debt restructuring during the 12 months prior to their default. A TDR loan is considered to be in default when payments are 90 days or more past due. The Company had no TDR loans that subsequently defaulted during the three months ended March 31, 2014.

	For three months ended March 31, 2015
(in thousands)	Number of Contracts	Period-End Outstanding Principal		Period-End Specific Reserve
Commercial real estate mortgages	1	$	73	$	—

All other TDR loans were performing in accordance with their restructured terms at March 31, 2015. As of March 31, 2015, there were no outstanding commitments to lend additional funds on restructured loans.

Past Due and Nonaccrual Loans and Leases

Loans are considered past due following the date when either interest or principal is contractually due and unpaid. The following tables provide a summary of past due and nonaccrual loans, excluding covered loans, at March 31, 2015 and December 31, 2014 based upon the length of time the loans have been past due:

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and Accruing		Nonaccrual		Total Past Due and Nonaccrual Loans		Current		Total Loans and Leases
March 31, 2015
Commercial	$	4,130	$	5,586	$	—	$	8,192	$	17,908	$	9,437,713	$	9,455,621
Commercial real estate mortgages	185		—		—		2,901		3,086		3,734,051		3,737,137
Residential mortgages:
Fixed	—		618		379		10,793		11,790		1,466,330		1,478,120
Variable	—		3,985		—		1,339		5,324		3,816,503		3,821,827
Total residential mortgages	—		4,603		379		12,132		17,114		5,282,833		5,299,947
Real estate construction:
Construction	—		—		—		—		—		766,840		766,840
Land	—		—		—		6,598		6,598		20,836		27,434
Total real estate construction	—		—		—		6,598		6,598		787,676		794,274
Home equity loans and lines of credit	—		350		240		3,507		4,097		787,634		791,731
Installment:
Commercial	—		—		—		—		—		249		249
Consumer	206		52		409		39		706		185,121		185,827
Total installment	206		52		409		39		706		185,370		186,076
Lease financing	703		—		—		7		710		644,859		645,569
Total	$	5,224	$	10,591	$	1,028	$	33,376	$	50,219	$	20,860,136	$	20,910,355
December 31, 2014
Commercial	$	8,462	$	325	$	148	$	15,096	$	24,031	$	9,336,945	$	9,360,976
Commercial real estate mortgages	693		—		—		3,575		4,268		3,535,435		3,539,703
Residential mortgages:
Fixed	—		309		921		10,365		11,595		1,390,357		1,401,952
Variable	—		1,165		—		1,578		2,743		3,702,108		3,704,851
Total residential mortgages	—		1,474		921		11,943		14,338		5,092,465		5,106,803
Real estate construction:
Construction	—		—		—		—		—		686,990		686,990
Land	—		—		—		6,598		6,598		16,636		23,234
Total real estate construction	—		—		—		6,598		6,598		703,626		710,224
Home equity loans and lines of credit	—		39		100		4,864		5,003		780,793		785,796
Installment:
Commercial	—		—		—		—		—		298		298
Consumer	324		113		346		84		867		183,448		184,315
Total installment	324		113		346		84		867		183,746		184,613
Lease financing	321		152		—		7		480		648,611		649,091
Total	$	9,800	$	2,103	$	1,515	$	42,167	$	55,585	$	20,281,621	$	20,337,206

Credit Quality Monitoring

The Company closely monitors and assesses credit quality and credit risk in the loan and lease portfolio on an ongoing basis. Loan risk classifications are continuously reviewed and updated. The following table provides a summary of the loan and lease portfolio, excluding covered loans, by loan type and credit quality classification as of March 31, 2015 and December 31, 2014. Nonclassified loans generally include those loans that are expected to be repaid in accordance with contractual loan terms. Classified loans are those loans that are classified as substandard or doubtful consistent with regulatory guidelines.

	March 31, 2015						December 31, 2014
(in thousands)	Nonclassified		Classified		Total		Nonclassified		Classified		Total
Commercial	$	9,383,150	$	72,471	$	9,455,621	$	9,304,636	$	56,340	$	9,360,976
Commercial real estate mortgages	3,697,901		39,236		3,737,137		3,511,229		28,474		3,539,703
Residential mortgages:
Fixed	1,456,060		22,060		1,478,120		1,375,175		26,777		1,401,952
Variable	3,792,414		29,413		3,821,827		3,675,723		29,128		3,704,851
Total residential mortgages	5,248,474		51,473		5,299,947		5,050,898		55,905		5,106,803
Real estate construction:
Construction	763,016		3,824		766,840		679,744		7,246		686,990
Land	18,475		8,959		27,434		16,636		6,598		23,234
Total real estate construction	781,491		12,783		794,274		696,380		13,844		710,224
Home equity loans and lines of credit	763,760		27,971		791,731		754,694		31,102		785,796
Installment:
Commercial	249		—		249		298		—		298
Consumer	185,152		675		185,827		183,190		1,125		184,315
Total installment	185,401		675		186,076		183,488		1,125		184,613
Lease financing	641,343		4,226		645,569		645,049		4,042		649,091
Total	$	20,701,520	$	208,835	$	20,910,355	$	20,146,374	$	190,832	$	20,337,206

Credit Quality on Covered Loans

The following is a summary of activity in the allowance for losses on covered loans:

	For the three months ended March 31,
(in thousands)	2015		2014
Balance, beginning of period	$	8,608	$	15,922
Provision for losses	497		4,655
Change in allowance due to loan removals	647		(2,138		)
Balance, end of period	$	9,752	$	18,439

The allowance for losses on covered loans was $9.8 million, $8.6 million and $18.4 million as of March 31, 2015, December 31, 2014 and March 31, 2014, respectively. The Company recorded provision expense of $0.5 million and $4.7 million during the three months ended March 31, 2015 and 2014, respectively. The Company updates its cash flow projections for covered loans accounted for under ASC 310-30 on a quarterly basis, and may recognize provision expense or reversal of provision for loan losses as a result of that analysis. The provision expense or reversal of provision for losses on covered loans is the result of changes in expected cash flows, both amount and timing, due to actual loan performance and the Company’s revised loan loss and prepayment forecasts. The revisions of these forecasts were based on the results of management’s review of market conditions, the credit quality of outstanding covered loans and the analysis of loan performance data since the acquisition of covered loans. The allowance for losses on covered loans is adjusted for any loan removals, which occur when a loan has been fully paid off, fully charged off, sold or transferred to OREO.

Covered loans accounted for under ASC 310-30 are generally considered accruing and performing loans as the loans accrete interest income over the estimated life of the loan when cash flows are reasonably estimable. Accordingly, acquired impaired loans that are contractually past due are still considered to be accruing and performing loans. If the timing and amount of future cash flows is not reasonably estimable, the loans may be classified as nonaccrual loans and interest income is not recognized until the timing and amount of future cash flows can be reasonably estimated. There were no covered loans that were on nonaccrual status as of March 31, 2015 and December 31, 2014.

At March 31, 2015, covered loans that were 30 to 89 days delinquent totaled $12.5 million and covered loans that were 90 days or more past due on accrual status totaled $22.1 million. At December 31, 2014, covered loans that were 30 to 89 days delinquent totaled $7.4 million and covered loans that were 90 days or more past due on accrual status totaled $28.3 million.

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Other Real Estate Owned

3 Months Ended

Mar. 31, 2015

Other Real Estate Owned.

Other Real Estate Owned

Note 6. Other Real Estate Owned

The following table provides a summary of OREO activity for the three months ended March 31, 2015 and 2014:

	For the three months ended March 31, 2015									For the three months ended March 31, 2014
(in thousands)	Non-Covered OREO			Covered OREO			Total			Non-Covered OREO			Covered OREO			Total
Balance, beginning of period	$	10,736		$	12,760		$	23,496		$	12,611		$	25,481		$	38,092
Additions	—			1,085			1,085			—			2,033			2,033
Sales	(4,779		)	(631		)	(5,410		)	(3,186		)	(2,504		)	(5,690		)
Valuation adjustments	—			(1,662		)	(1,662		)	(13		)	(155		)	(168		)
Balance, end of period	$	5,957		$	11,552		$	17,509		$	9,412		$	24,855		$	34,267

At March 31, 2015, OREO was $17.5 million and included $11.6 million of covered OREO. At December 31, 2014, OREO was $23.5 million and included $12.8 million of covered OREO. The balance of OREO at March 31, 2015 and December 31, 2014 is net of valuation allowances of $4.1 million and $7.4 million, respectively. At March 31, 2015, the Company’s recorded investment in residential mortgage loans, excluding covered loans, for which foreclosure proceedings had been initiated totaled $6.9 million.

Covered OREO expenses and valuation write-downs are recorded in the noninterest expense section of the consolidated statements of income and gains or losses on sale of covered OREO are recognized in the noninterest income section. Under the loss-sharing agreements, 80 percent of eligible covered OREO expenses, valuation write-downs, and losses on sales are reimbursable to the Company from the FDIC, and 80 percent of covered gains on sales are payable to the FDIC. The portion of these expenses and income shared with the FDIC is recorded in FDIC loss sharing income (expense), net in the noninterest income section of the consolidated statements of income.

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Shareholders' Equity

3 Months Ended

Mar. 31, 2015

Shareholders' Equity

Shareholders' Equity

Note 8. Shareholders’ Equity

The components of AOCI at March 31, 2015 and December 31, 2014 are as follows:

(in thousands)	March 31, 2015			December 31, 2014
Net unrealized gain (loss) on securities available-for-sale	$	5,045		$	(7,070	)
Foreign currency translation adjustments	(14		)	(4		)
Total accumulated other comprehensive income (loss)	$	5,031		$	(7,074	)

The following table presents the tax effects allocated to each component of other comprehensive income (loss) for the three months ended March 31, 2015 and 2014:

	For the three months ended March 31, 2015									For the three months ended March 31, 2014
(in thousands)	Pre-tax			Tax expense (benefit)			Net-of-tax			Pre-tax			Tax expense (benefit)			Net-of-tax
Securities available-for-sale:
Net unrealized gains arising during the period	$	24,477		$	10,260		$	14,217		$	21,528		$	8,975		$	12,553
Reclassification adjustment for net gains included in net income (1)	(3,386		)	(1,417		)	(1,969		)	(2,192		)	(917		)	(1,275		)
Non-credit related impairment loss	(228		)	(95		)	(133		)	—			—			—
Total securities available-for-sale	20,863			8,748			12,115			19,336			8,058			11,278
Foreign currency translation adjustments	(10		)	—			(10		)	—			—			—
Total other comprehensive income	$	20,853		$	8,748		$	12,105		$	19,336		$	8,058		$	11,278

(1) Recognized in Gain on sale of securities in the consolidated statements of income.

The following table summarizes the Company’s share repurchases for the three months ended March 31, 2015. All repurchases relate to shares withheld or previously owned shares used to pay taxes due upon vesting of restricted stock. There were no issuer repurchases of the Corporation’s common stock as part of its repurchase plan for the three months ended March 31, 2015.

Period	Total Number of Shares Purchased	Average Price Paid per Share
January 1, 2015 to January 31, 2015	294	$	82.64
February 1, 2015 to February 28, 2015	28,854	89.91
March 1, 2015 to March 31, 2015	3,999	89.88
Total share repurchases	33,147	89.84

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Shareholders' Equity (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	1 Months Ended			3 Months Ended
	Mar. 31, 2015	Feb. 28, 2015	Jan. 31, 2015	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Components of AOCI
Net unrealized gain (loss) on securities available-for-sale	$ 5,045			$ 5,045		$ (7,070)
Foreign currency translation adjustments	(14)			(14)		(4)
Total accumulated other comprehensive income (loss)	5,031			5,031		(7,074)
Securities available-for-sale:
Net unrealized losses arising during the period				24,477	21,528
Reclassification adjustment for net gains included in net income				(3,386)	(2,192)
Non-credit related impairment loss				(228)
Total securities available for sale				20,863	19,336
Foreign currency translation adjustments				(10)
Total other comprehensive income (loss)				20,853	19,336
Components and related tax effects of other comprehensive income (loss)
Net unrealized gain (losses) arising during the period				10,260	8,975
Reclassification adjustment for net gains included in net income, taxes				(1,417)	(917)
Non-credit related impairment loss, taxes				(95)
Total securities available for sale				8,748	8,058
Total other comprehensive income (loss)				8,748	8,058
Components of other comprehensive income (loss), net of tax
Net unrealized (losses) gains arising during the period				14,217	12,553
Reclassification adjustment for net gains/losses included in net income				(1,969)	(1,275)
Non-credit related impairment loss				(133)	0
Total securities available for sale				12,115	11,278
Foreign currency translation adjustments				(10)
Total other comprehensive income				$ 12,105	$ 11,278
Common shares repurchased
Total number of Shares (or Units) Purchased	3,999	28,854	294	33,147
Average Price Paid per Share (or Unit) (in dollars per share)	$ 89.88	$ 89.91	$ 82.64	$ 89.84

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Share-Based Compensation (Detail) (USD $) Share data in Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 plan	Mar. 31, 2014
Share-based compensation
Number of share-based compensation plans	1
Shares available for future grants	2.4
Compensation cost recognized for share-based awards	$ 6,200,000	$ 5,400,000
Total income tax benefit recognized for share-based compensation arrangements	2,600,000	2,300,000
Cash received from the exercise of stock options	21,320,000	13,207,000
Actual tax benefit realized for the tax deductions from stock option exercises	3,400,000	1,700,000
Stock options
Share-based compensation, fair value
Weighted-average volatility (as a percent)	26.66%	27.35%
Dividend yield (as a percent)	1.55%	1.79%
Expected term	6 years 22 days	6 years 26 days
Risk-free interest rate (as a percent)	1.78%	1.99%
Weighted-average grant-date fair values of options granted (in dollars per share)	$ 21.80	$ 17.94
Total intrinsic value of options exercised	$ 8,200,000	$ 4,000,000

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Borrowed Funds (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Short-term borrowings
Total short-term borrowings	$ 4,400	$ 322,861
Long-term debt
Long-term debt	634,425	638,600
5.25% Senior Notes Due September 2020 | City National Corporation
Long-term debt
Long-term debt	299,559	299,540
Fixed interest rate (as a percent)	5.25%	5.25%
9.00% Subordinated Notes Due August 2019 | City National Bank:
Long-term debt
Long-term debt	75,000	75,000
Fixed interest rate (as a percent)	9.00%	9.00%
5.375% Subordinated Notes Due July 2022 | City National Bank:
Long-term debt
Long-term debt	149,995	149,994
Fixed interest rate (as a percent)	5.375%	5.375%
Floating Rate Securities Due November 2034 | Business Bancorp Capital Trust I
Long-term debt
Long-term debt	5,155	5,155
Variable rate basis	three-month LIBOR
Basis spread (as a percent)	1.965%
Interest rate as of reporting date (as a percent)	2.23%
Nonrecourse debt
Short-term borrowings
Current portion of nonrecourse debt	4,400	2,861
Long-term debt
Long-term debt	94,997	99,139
Average interest rate (as a percent)	3.88%
Other long-term debt
Long-term debt
Long-term debt	9,719	9,772
Fixed interest rate (as a percent)	5.64%
Federal funds purchased
Short-term borrowings
Federal funds purchased		$ 320,000

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Borrowed Funds (Tables)

3 Months Ended

Mar. 31, 2015

Borrowed Funds

Schedule of short-term borrowings and long-term debt

	March 31,		December 31,
(in thousands) (1)	2015		2014
Short-term borrowings
Federal funds purchased	$	—	$	320,000
Current portion of nonrecourse debt (2)	4,400		2,861
Total short-term borrowings	$	4,400	$	322,861
Long-term debt
Senior notes:
City National Corporation - 5.25% Senior Notes Due September 2020	$	299,559	$	299,540
Subordinated debt:
City National Bank - 9.00% Subordinated Notes Due August 2019	75,000		75,000
City National Bank - 5.375% Subordinated Notes Due July 2022	149,995		149,994
Junior subordinated debt:
Floating Rate Business Bancorp Capital Trust I Securities due November 2034 (3)	5,155		5,155
Nonrecourse debt (2)	94,997		99,139
Other long-term debt (4)	9,719		9,772
Total long-term debt	$	634,425	$	638,600

(1) The carrying value of certain borrowed funds is net of discount which is being amortized into interest expense.

(2) Nonrecourse debt bears interest at an average rate of 3.88 percent as of March 31, 2015 and has maturity dates ranging from June 2015 to February 2023.

(3) These floating rate securities bear interest of three-month LIBOR plus 1.965 percent which is reset quarterly.  As of
March 31, 2015, the interest rate was approximately 2.23 percent.

(4) Other long-term debt includes a note payable that bears a fixed interest rate of 5.64 percent and is scheduled to mature in
June 2017.

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Securities (Detail 4) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Securities available-for-sale:
Securities available-for-sale, Fair Value, Less than 12 months	$ 1,204,354	$ 2,027,804
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months	2,696	6,728
Securities available-for-sale, Fair Value, 12 months or greater	1,267,995	1,472,436
Securities available-for-sale, Estimated Unrealized Loss, 12 months or greater	21,566	37,586
Securities available-for-sale, Fair Value, Total	2,472,349	3,500,240
Securities available-for-sale, Estimated Unrealized Loss, Total	24,262	44,314
Securities held-to-maturity:
Securities held-to-maturity, Fair Value, Less than 12 months	298,572	283,478
Securities held-to-maturity, Estimated Unrealized Loss, Less than 12 months	1,751	2,568
Securities held-to-maturity, Fair Value, 12 months or greater	261,317	824,838
Securities held-to-maturity, Estimated Unrealized Loss, 12 months or greater	3,447	12,475
Securities held-to-maturity, Fair Value, Total	559,889	1,108,316
Securities held-to-maturity, Estimated Unrealized Loss, Total	5,198	15,043
U.S. Treasury
Securities available-for-sale:
Securities available-for-sale, Fair Value, Less than 12 months	66,688	15,814
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months	15	10
Securities available-for-sale, Fair Value, Total	66,688	15,814
Securities available-for-sale, Estimated Unrealized Loss, Total	15	10
Other information
Number of available-for-sale and held-to-maturity securities in the unrealized loss position	2	2
Federal agency - Debt
Securities available-for-sale:
Securities available-for-sale, Fair Value, Less than 12 months	466,094	1,008,234
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months	429	2,622
Securities available-for-sale, Fair Value, 12 months or greater		135,868
Securities available-for-sale, Estimated Unrealized Loss, 12 months or greater		658
Securities available-for-sale, Fair Value, Total	466,094	1,144,102
Securities available-for-sale, Estimated Unrealized Loss, Total	429	3,280
Securities held-to-maturity:
Securities held-to-maturity, Fair Value, 12 months or greater	5,950	26,316
Securities held-to-maturity, Estimated Unrealized Loss, 12 months or greater	72	255
Securities held-to-maturity, Fair Value, Total	5,950	26,316
Securities held-to-maturity, Estimated Unrealized Loss, Total	72	255
Other information
Number of available-for-sale and held-to-maturity securities in the unrealized loss position	12	37
Federal agency - MBS
Securities available-for-sale:
Securities available-for-sale, Fair Value, Less than 12 months		35
Securities available-for-sale, Fair Value, 12 months or greater	56,741	57,970
Securities available-for-sale, Estimated Unrealized Loss, 12 months or greater	874	1,014
Securities available-for-sale, Fair Value, Total	56,741	58,005
Securities available-for-sale, Estimated Unrealized Loss, Total	874	1,014
Securities held-to-maturity:
Securities held-to-maturity, Fair Value, Less than 12 months	34,532	4,800
Securities held-to-maturity, Estimated Unrealized Loss, Less than 12 months	81	21
Securities held-to-maturity, Fair Value, 12 months or greater	40,762	114,856
Securities held-to-maturity, Estimated Unrealized Loss, 12 months or greater	486	2,254
Securities held-to-maturity, Fair Value, Total	75,294	119,656
Securities held-to-maturity, Estimated Unrealized Loss, Total	567	2,275
Other information
Number of available-for-sale and held-to-maturity securities in the unrealized loss position	17	23
CMOs - Federal agency
Securities available-for-sale:
Securities available-for-sale, Fair Value, Less than 12 months	549,307	871,026
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months	1,652	3,417
Securities available-for-sale, Fair Value, 12 months or greater	1,195,370	1,261,695
Securities available-for-sale, Estimated Unrealized Loss, 12 months or greater	20,301	35,452
Securities available-for-sale, Fair Value, Total	1,744,677	2,132,721
Securities available-for-sale, Estimated Unrealized Loss, Total	21,953	38,869
Securities held-to-maturity:
Securities held-to-maturity, Fair Value, Less than 12 months	180,042	202,014
Securities held-to-maturity, Estimated Unrealized Loss, Less than 12 months	937	2,247
Securities held-to-maturity, Fair Value, 12 months or greater	180,742	588,019
Securities held-to-maturity, Estimated Unrealized Loss, 12 months or greater	1,812	8,045
Securities held-to-maturity, Fair Value, Total	360,784	790,033
Securities held-to-maturity, Estimated Unrealized Loss, Total	2,749	10,292
Other information
Number of available-for-sale and held-to-maturity securities in the unrealized loss position	101	141
CMOs - Non-agency
Securities available-for-sale:
Securities available-for-sale, Fair Value, Less than 12 months	1,928	1,949
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months	16	15
Securities available-for-sale, Fair Value, 12 months or greater	12,331	12,720
Securities available-for-sale, Estimated Unrealized Loss, 12 months or greater	344	396
Securities available-for-sale, Fair Value, Total	14,259	14,669
Securities available-for-sale, Estimated Unrealized Loss, Total	360	411
Other information
Number of available-for-sale and held-to-maturity securities in the unrealized loss position	3	3
State and municipal
Securities available-for-sale:
Securities available-for-sale, Fair Value, Less than 12 months	107,251	130,208
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months	171	314
Securities available-for-sale, Fair Value, 12 months or greater	3,553	4,183
Securities available-for-sale, Estimated Unrealized Loss, 12 months or greater	47	66
Securities available-for-sale, Fair Value, Total	110,804	134,391
Securities available-for-sale, Estimated Unrealized Loss, Total	218	380
Securities held-to-maturity:
Securities held-to-maturity, Fair Value, Less than 12 months	83,998	14,851
Securities held-to-maturity, Estimated Unrealized Loss, Less than 12 months	733	76
Securities held-to-maturity, Fair Value, 12 months or greater	33,863	95,647
Securities held-to-maturity, Estimated Unrealized Loss, 12 months or greater	1,077	1,921
Securities held-to-maturity, Fair Value, Total	117,861	110,498
Securities held-to-maturity, Estimated Unrealized Loss, Total	1,810	1,997
Other information
Number of available-for-sale and held-to-maturity securities in the unrealized loss position	180	225
Other debt securities
Securities available-for-sale:
Securities available-for-sale, Fair Value, Less than 12 months	12,609
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months	3
Securities available-for-sale, Fair Value, Total	12,609
Securities available-for-sale, Estimated Unrealized Loss, Total	3
Securities held-to-maturity:
Securities held-to-maturity, Fair Value, Less than 12 months		61,813
Securities held-to-maturity, Estimated Unrealized Loss, Less than 12 months		224
Securities held-to-maturity, Fair Value, Total		61,813
Securities held-to-maturity, Estimated Unrealized Loss, Total		224
Other information
Number of available-for-sale and held-to-maturity securities in the unrealized loss position	1	5
Total debt securities
Securities available-for-sale:
Securities available-for-sale, Fair Value, Less than 12 months	1,203,877	2,027,266
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months	2,286	6,378
Securities available-for-sale, Fair Value, 12 months or greater	1,267,995	1,472,436
Securities available-for-sale, Estimated Unrealized Loss, 12 months or greater	21,566	37,586
Securities available-for-sale, Fair Value, Total	2,471,872	3,499,702
Securities available-for-sale, Estimated Unrealized Loss, Total	23,852	43,964
Other information
Number of available-for-sale and held-to-maturity securities in the unrealized loss position	316	436
Equity securities and mutual funds
Securities available-for-sale:
Securities available-for-sale, Fair Value, Less than 12 months	477	538
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months	410	350
Securities available-for-sale, Fair Value, Total	477	538
Securities available-for-sale, Estimated Unrealized Loss, Total	$ 410	$ 350
Other information
Number of available-for-sale and held-to-maturity securities in the unrealized loss position	1	1

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Income Taxes

3 Months Ended

Mar. 31, 2015

Income Taxes

Income Taxes

Note 13. Income Taxes

The Company recognized income tax expense of $30.6 million and $31.0 million for the three months ended March 31, 2015 and 2014, respectively.

The Company recognizes accrued interest and penalties relating to uncertain tax positions as an income tax provision expense. The Company recognized a nominal amount of interest and penalties for the three months ended March 31, 2015 and 2014. The Company had approximately $2.5 million of accrued interest and penalties as of March 31, 2015 and December 31, 2014.

The Company and its subsidiaries file federal and various state income tax returns. The Company is currently being audited by the Internal Revenue Service (“IRS”) for the tax year 2014. The Company is also under audit with the California Franchise Tax Board for the tax years 2005 to 2007. The financial statement impact resulting from completion of these audits is not expected to be material.

From time to time, there may be differences in opinion with respect to the tax treatment of certain transactions. If a tax position which was previously recognized on the consolidated financial statements is no longer more likely than not to be sustained upon a challenge from the taxing authorities, the tax benefit from the tax position will be derecognized. The Company did not have any material tax positions for which previously recognized benefits were derecognized during the three-month period ended March 31, 2015.

Prior period income tax expense has been adjusted to reflect the adoption of ASU 2014-01 on January 1, 2015. See Note 1, Summary of Significant Accounting Policies, for further discussion of ASU 2014-01.

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Segment Results

3 Months Ended

Mar. 31, 2015

Segment Results

Segment Results

Note 18. Segment Results

The Company has three reportable segments: Commercial and Private Banking, Wealth Management and Other. The factors considered in determining whether individual operating segments could be aggregated include that the operating segments: (i) offer the same products and services, (ii) offer services to the same types of clients, (iii) provide services in the same manner and (iv) operate in the same regulatory environment. The management accounting process measures the performance of the operating segments based on the Company’s management structure and is not necessarily comparable with similar information for other financial services companies. If the management structures and/or the allocation process changes, allocations, transfers and assignments may change.

The Commercial and Private Banking reportable segment is the aggregation of the Commercial and Private Banking, Real Estate, Entertainment, Corporate Banking, Core Branch Banking and FAEF operating segments. The Commercial and Private Banking segment provides banking products and services, including commercial and mortgage lending, lines of credit, equipment lease financing, deposits, cash management services, international trade finance and letters of credit to small and medium-sized businesses, entrepreneurs and affluent individuals. This segment primarily serves clients in California, New York, Nevada, Tennessee and Georgia. FAEF serves clients nationwide.

The Wealth Management segment includes the Corporation’s investment advisory affiliates and the Bank’s Wealth Management Services. The asset management affiliates and the Wealth Management division of the Bank make the following investment advisory and wealth management resources and expertise available to individual and institutional clients: investment management, wealth advisory services, brokerage, retirement, estate and financial planning and personal, business, custodial and employee trust services. The Wealth Management segment also advises and makes available mutual funds under the name of City National Rochdale Funds. Both the asset management affiliates and the Bank’s Wealth Management division provide proprietary and nonproprietary products and offer a full spectrum of investment solutions in multiple asset classes and investment styles, including fixed-income instruments, mutual funds, domestic and international equities, and alternative investments such as hedge funds. This segment serves clients nationwide.

The Other segment includes all other subsidiaries of the Company, the corporate administration departments, including the Treasury Department and the Asset Liability Funding Center, that have not been allocated to the other segments, and inter-segment eliminations for revenue recognized in multiple segments for management reporting purposes. The Company uses traditional matched-maturity funds transfer pricing methodology. However, both positive and negative variances occur over time when transfer pricing non-maturing balance sheet items such as demand deposits. These variances, offset in the Funding Center, are evaluated at least annually by management and allocated back to the business segments as deemed necessary.

Business segment earnings are the primary measure of the segment’s performance as evaluated by management. Business segment earnings include direct revenue and expenses of the segment as well as corporate and inter-company cost allocations. Allocations of corporate expenses, such as data processing and human resources, are calculated based on estimated activity or usage levels for the fiscal year. Costs associated with intercompany support and services groups, such as Operational Services, are allocated to each business segment based on actual services used. Capital is allocated based on the estimated risk within each business segment. The methodology of allocating capital is based on each business segment’s credit, market, and operational risk profile. If applicable, any provision for credit losses is allocated based on various credit factors, including, but not limited to, credit risk ratings, credit rating fluctuation, charge-offs and recoveries and loan growth. Provision for income taxes is allocated to the segments based on the Company’s effective tax rate.

Exposure to market risk is managed in the Company’s Treasury department. Interest-rate risk is mostly removed from the Commercial and Private Banking segment and transferred to the Funding Center through a fund transfer pricing (“FTP”) methodology and allocation model. The FTP model records a cost of funds or credit for funds using a combination of matched maturity funding for fixed term assets and liabilities and a blended rate for the remaining assets and liabilities with varying maturities.

The Bank’s investment portfolio and unallocated equity are included in the Other segment. Amortization expense associated with customer-relationship intangibles is charged to the affected operating segments.

Selected financial information for each segment is presented in the following tables. Commercial and Private Banking includes all revenue and costs from products and services utilized by clients of Commercial and Private Banking, including both revenue and costs for Wealth Management products and services. The revenues and costs associated with Wealth Management products and services that are allocated to Commercial and Private Banking for management reporting purposes are eliminated in the Other segment. The current period reflects any changes made in the process or methodology for allocations to the reportable segments. Prior period segment results have been revised to conform to current period presentation.

	For the three months ended March 31, 2015
	Commercial and		Wealth					Consolidated
(in thousands)	Private Banking		Management		Other			Company
Earnings Summary:
Net interest income	$	207,826	$	807	$	7,947		$	216,580
Provision for losses on covered loans	497		—		—			497
Noninterest income	51,496		75,089		(15,510		)	111,075
Depreciation and amortization	2,715		1,861		11,783			16,359
Noninterest expense	189,882		54,603		(26,402		)	218,083
Income before income taxes	66,228		19,432		7,056			92,716
Provision for income taxes	21,987		6,268		2,342			30,597
Net income	44,241		13,164		4,714			62,119
Less: Net income attributable to noncontrolling interest	—		553		—			553
Net income attributable to City National Corporation	$	44,241	$	12,611	$	4,714		$	61,566
Selected Average Balances:
Loans and leases, excluding covered loans	$	20,348,103	$	—	$	56,617		$	20,404,720
Covered loans	492,438		—		—			492,438
Total assets	20,960,198		745,258		10,554,163			32,259,619
Deposits	27,549,867		87,848		170,668			27,808,383
Goodwill	393,177		242,691		—			635,868
Customer-relationship intangibles, net	1,650		32,534		—			34,184

	For the three months ended March 31, 2014
	Commercial and		Wealth					Consolidated
(in thousands)	Private Banking		Management		Other			Company
Earnings Summary:
Net interest income	$	189,708	$	325	$	9,765		$	199,798
Provision for losses on covered loans	4,655		—		—			4,655
Noninterest income	47,142		63,566		(9,460		)	101,248
Depreciation and amortization	2,821		1,747		4,747			9,315
Noninterest expense	167,695		52,214		(18,372		)	201,537
Income before income taxes	61,679		9,930		13,930			85,539
Provision for income taxes	22,544		3,375		5,091			31,010
Net income	39,135		6,555		8,839			54,529
Less: Net income attributable to noncontrolling interest	—		699		—			699
Net income attributable to City National Corporation	$	39,135	$	5,856	$	8,839		$	53,830
Selected Average Balances:
Loans and leases, excluding covered loans	$	17,283,410	$	—	$	55,009		$	17,338,419
Covered loans	696,163		—		—			696,163
Total assets	18,239,567		657,723		10,516,708			29,413,998
Deposits	25,051,747		87,769		232,082			25,371,598
Goodwill	393,177		249,445		—			642,622
Customer-relationship intangibles, net	3,134		36,921		—			40,055

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Securities (Detail 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Expected remaining maturities of debt securities available-for-sale, fair value
Fair Value	$ 5,210,388	$ 5,882,983
Expected remaining maturities of debt securities held-to-maturity, amortized cost
Total of debt securities held-to-maturity, amortized cost	3,413,806	3,427,031
Total debt securities
Expected remaining maturities of debt securities available-for-sale, fair value
Securities available-for-sale, One year or less, fair value	1,083,708
Securities available-for-sale, Over 1 year through 5 years, fair value	4,104,631
Securities available-for-sale, Over 5 years through 10 years, fair value	17,544
Securities available-for-sale, Over 10 years, fair value	3,355
Fair Value	5,209,238	5,879,837
Expected remaining maturities of debt securities available-for-sale, amortized cost
Securities available-for-sale, One year or less, amortized cost	1,081,124
Securities available-for-sale, Over 1 year through 5 years, amortized cost	4,097,536
Securities available-for-sale, Over 5 years through 10 years, amortized cost	17,600
Securities available-for-sale, Over 10 years, amortized cost	3,400
Total of debt securities available-for-sale, amortized cost	5,199,660
Expected remaining maturities of debt securities held-to-maturity, amortized cost
Securities held-to-maturity, Over 1 year through 5 years, amortized cost	1,180,154
Securities held-to-maturity, Over 5 years through 10 years, amortized cost	1,989,301
Securities held-to-maturity, Over 10 years, amortized cost	244,351
Total of debt securities held-to-maturity, amortized cost	3,413,806
U.S. Treasury
Expected remaining maturities of debt securities available-for-sale, fair value
Securities available-for-sale, One year or less, fair value	98,400
Securities available-for-sale, Over 1 year through 5 years, fair value	17,507
Fair Value	115,907	116,926
Federal agency - Debt
Expected remaining maturities of debt securities available-for-sale, fair value
Securities available-for-sale, One year or less, fair value	597,445
Securities available-for-sale, Over 1 year through 5 years, fair value	622,775
Fair Value	1,220,220	1,398,581
Expected remaining maturities of debt securities held-to-maturity, amortized cost
Securities held-to-maturity, Over 5 years through 10 years, amortized cost	132,829
Securities held-to-maturity, Over 10 years, amortized cost	153,752
Total of debt securities held-to-maturity, amortized cost	286,581	292,932
Federal agency - MBS
Expected remaining maturities of debt securities available-for-sale, fair value
Securities available-for-sale, Over 1 year through 5 years, fair value	83,971
Securities available-for-sale, Over 5 years through 10 years, fair value	17,544
Fair Value	101,515	104,526
Expected remaining maturities of debt securities held-to-maturity, amortized cost
Securities held-to-maturity, Over 1 year through 5 years, amortized cost	49,153
Securities held-to-maturity, Over 5 years through 10 years, amortized cost	503,264
Securities held-to-maturity, Over 10 years, amortized cost	4,514
Total of debt securities held-to-maturity, amortized cost	556,931	553,589
CMOs - Federal agency
Expected remaining maturities of debt securities available-for-sale, fair value
Securities available-for-sale, One year or less, fair value	157,341
Securities available-for-sale, Over 1 year through 5 years, fair value	3,047,545
Fair Value	3,204,886	3,580,590
Expected remaining maturities of debt securities held-to-maturity, amortized cost
Securities held-to-maturity, Over 1 year through 5 years, amortized cost	867,361
Securities held-to-maturity, Over 5 years through 10 years, amortized cost	898,964
Total of debt securities held-to-maturity, amortized cost	1,766,325	1,811,574
CMOs - Non-agency
Expected remaining maturities of debt securities available-for-sale, fair value
Securities available-for-sale, One year or less, fair value	1,381
Securities available-for-sale, Over 1 year through 5 years, fair value	21,430
Fair Value	22,811	24,014
State and municipal
Expected remaining maturities of debt securities available-for-sale, fair value
Securities available-for-sale, One year or less, fair value	171,999
Securities available-for-sale, Over 1 year through 5 years, fair value	252,104
Securities available-for-sale, Over 10 years, fair value	3,355
Fair Value	427,458	479,031
Expected remaining maturities of debt securities held-to-maturity, amortized cost
Securities held-to-maturity, Over 1 year through 5 years, amortized cost	177,608
Securities held-to-maturity, Over 5 years through 10 years, amortized cost	454,244
Securities held-to-maturity, Over 10 years, amortized cost	86,085
Total of debt securities held-to-maturity, amortized cost	717,937	682,705
Other debt securities
Expected remaining maturities of debt securities available-for-sale, fair value
Securities available-for-sale, One year or less, fair value	57,142
Securities available-for-sale, Over 1 year through 5 years, fair value	59,299
Fair Value	116,441	176,169
Expected remaining maturities of debt securities held-to-maturity, amortized cost
Securities held-to-maturity, Over 1 year through 5 years, amortized cost	86,032
Total of debt securities held-to-maturity, amortized cost	$ 86,032	$ 86,231

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Segment Results (Tables)

3 Months Ended

Mar. 31, 2015

Segment Results

Schedule of segment results

	For the three months ended March 31, 2015
	Commercial and		Wealth					Consolidated
(in thousands)	Private Banking		Management		Other			Company
Earnings Summary:
Net interest income	$	207,826	$	807	$	7,947		$	216,580
Provision for losses on covered loans	497		—		—			497
Noninterest income	51,496		75,089		(15,510		)	111,075
Depreciation and amortization	2,715		1,861		11,783			16,359
Noninterest expense	189,882		54,603		(26,402		)	218,083
Income before income taxes	66,228		19,432		7,056			92,716
Provision for income taxes	21,987		6,268		2,342			30,597
Net income	44,241		13,164		4,714			62,119
Less: Net income attributable to noncontrolling interest	—		553		—			553
Net income attributable to City National Corporation	$	44,241	$	12,611	$	4,714		$	61,566
Selected Average Balances:
Loans and leases, excluding covered loans	$	20,348,103	$	—	$	56,617		$	20,404,720
Covered loans	492,438		—		—			492,438
Total assets	20,960,198		745,258		10,554,163			32,259,619
Deposits	27,549,867		87,848		170,668			27,808,383
Goodwill	393,177		242,691		—			635,868
Customer-relationship intangibles, net	1,650		32,534		—			34,184

	For the three months ended March 31, 2014
	Commercial and		Wealth					Consolidated
(in thousands)	Private Banking		Management		Other			Company
Earnings Summary:
Net interest income	$	189,708	$	325	$	9,765		$	199,798
Provision for losses on covered loans	4,655		—		—			4,655
Noninterest income	47,142		63,566		(9,460		)	101,248
Depreciation and amortization	2,821		1,747		4,747			9,315
Noninterest expense	167,695		52,214		(18,372		)	201,537
Income before income taxes	61,679		9,930		13,930			85,539
Provision for income taxes	22,544		3,375		5,091			31,010
Net income	39,135		6,555		8,839			54,529
Less: Net income attributable to noncontrolling interest	—		699		—			699
Net income attributable to City National Corporation	$	39,135	$	5,856	$	8,839		$	53,830
Selected Average Balances:
Loans and leases, excluding covered loans	$	17,283,410	$	—	$	55,009		$	17,338,419
Covered loans	696,163		—		—			696,163
Total assets	18,239,567		657,723		10,516,708			29,413,998
Deposits	25,051,747		87,769		232,082			25,371,598
Goodwill	393,177		249,445		—			642,622
Customer-relationship intangibles, net	3,134		36,921		—			40,055

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 62,119	$ 54,529
Securities available-for-sale:
Net unrealized gains arising during the period	14,217	12,553
Reclassification adjustment for net gains included in net income	(1,969)	(1,275)
Non-credit related impairment loss	(133)	0
Foreign currency translation adjustments	(10)
Total other comprehensive income	12,105	11,278
Comprehensive income	74,224	65,807
Less: Comprehensive income attributable to noncontrolling interest	553	699
Comprehensive income attributable to City National Corporation	$ 73,671	$ 65,108

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Fair Value Measurements

3 Months Ended

Mar. 31, 2015

Fair Value Measurements

Fair Value Measurements

The following tables summarize assets and liabilities measured at fair value as of March 31, 2015 and December 31, 2014 by level in the fair value hierarchy:

			Fair Value Measurements at Reporting Date Using
(in thousands)	Balance as of March 31, 2015		Quoted Prices in Active Markets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Measured on a Recurring Basis
Assets
Securities available-for-sale:
U.S. Treasury	$	115,907	$	115,907	$	—	$	—
Federal agency - Debt	1,220,220		—		1,220,220		—
Federal agency - MBS	101,515		—		101,515		—
CMOs - Federal agency	3,204,886		—		3,204,886		—
CMOs - Non-agency	22,811		—		22,811		—
State and municipal	427,458		—		423,905		3,553
Other debt securities	116,441		—		116,441		—
Equity securities and mutual funds	1,150		1,150		—		—
Trading securities	102,546		98,014		4,532		—
Derivative assets (1)	76,695		15,117		60,406		1,172
Contingent consideration asset (1)	2,930		—		—		2,930
Total assets at fair value	$	5,392,559	$	230,188	$	5,154,716	$	7,655
Liabilities
Derivative liabilities	$	76,938	$	15,660	$	61,278	$	—
Contingent consideration liability	35,401		—		—		35,401
FDIC clawback liability	15,963		—		—		15,963
Other liabilities	904		—		904		—
Total liabilities at fair value (2)	$	129,206	$	15,660	$	62,182	$	51,364
Redeemable noncontrolling interest	$	37,326	$	—	$	—	$	37,326
Measured on a Nonrecurring Basis
Assets
Other real estate owned (3)	$	6,506	$	—	$	—	$	6,506
Private equity and alternative investments	1,078		—		—		1,078
Total assets at fair value	$	7,584	$	—	$	—	$	7,584

(1) Reported in Other assets in the consolidated balance sheets.

(2) Reported in Other liabilities in the consolidated balance sheets.

(3) Includes covered OREO.

			Fair Value Measurements at Reporting Date Using
(in thousands)	Balance as of December 31, 2014		Quoted Prices in Active Markets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Measured on a Recurring Basis
Assets
Securities available-for-sale:
U.S. Treasury	$	116,926	$	116,926	$	—	$	—
Federal agency - Debt	1,398,581		—		1,398,581		—
Federal agency - MBS	104,526		—		104,526		—
CMOs - Federal agency	3,580,590		—		3,580,590		—
CMOs - Non-agency	24,014		—		24,014		—
State and municipal	479,031		—		475,484		3,547
Other debt securities	176,169		—		176,169		—
Equity securities and mutual funds	3,146		3,146		—		—
Trading securities	173,188		171,778		1,410		—
Derivative assets (1)	51,586		6,106		44,598		882
Contingent consideration asset (1)	2,930		—		—		2,930
Total assets at fair value	$	6,110,687	$	297,956	$	5,805,372	$	7,359
Liabilities
Derivative liabilities	$	51,309	$	6,623	$	44,686	$	—
Contingent consideration liability	34,983		—		—		34,983
FDIC clawback liability	15,106		—		—		15,106
Other liabilities	946		—		946		—
Total liabilities at fair value (2)	$	102,344	$	6,623	$	45,632	$	50,089
Redeemable noncontrolling interest	$	39,978	$	—	$	—	$	39,978
Measured on a Nonrecurring Basis
Assets
Other real estate owned (3)	$	5,644	$	—	$	—	$	5,644
Total assets at fair value	$	5,644	$	—	$	—	$	5,644

(1) Reported in Other assets in the consolidated balance sheets.

(2) Reported in Other liabilities in the consolidated balance sheets.

(3) Includes covered OREO.

At March 31, 2015, $5.39 billion, or approximately 16 percent, of the Company’s total assets were recorded at fair value on a recurring basis, compared with $6.11 billion, or 19 percent, at December 31, 2014. The majority of these financial assets were valued using Level 1 or Level 2 inputs. Less than one percent of total assets were measured using Level 3 inputs. At March 31, 2015, $129.2 million of the Company’s total liabilities were recorded at fair value using mostly Level 2 or Level 3 inputs, compared with $102.3 million at December 31, 2014. There were no transfers between Level 1 and Level 2 of the fair value hierarchy for assets or liabilities measured on a recurring basis during the three months ended March 31, 2015. At March 31, 2015, $7.6 million of the Company’s total assets were recorded at fair value on a nonrecurring basis, compared with $5.6 million at December 31, 2014. These assets represent less than one percent of total assets and were measured using Level 3 inputs.

Recurring Fair Value Measurements

Assets and liabilities for which fair value measurement is based on significant unobservable inputs are classified as Level 3 in the fair value hierarchy. The following table provides a reconciliation of the beginning and ending balances for Level 3 assets and liabilities measured at fair value on a recurring basis for the three months ended March 31, 2015 and 2014.

Level 3 Assets and Liabilities Measured on a Recurring Basis

	For the three months ended March 31, 2015
(in thousands)	Securities Available-for- Sale		Equity Warrants			Contingent Consideration Asset		Contingent Consideration Liability			FDIC Clawback Liability
Balance, beginning of period	$	3,547	$	882		$	2,930	$	(34,983	)	$	(15,106	)
Total realized/unrealized gains (losses):
Included in earnings	—		(8		)	—		—			(857		)
Included in other comprehensive income	6		—			—		—			—
Additions	—		298			—		—			—
Other (1)	—		—			—		(418		)	—
Balance, end of period	$	3,553	$	1,172		$	2,930	$	(35,401	)	$	(15,963	)

	For the three months ended March 31, 2014
(in thousands)	Securities Available-for- Sale			Contingent Consideration Liability			FDIC Clawback Liability
Balance, beginning of period	$	3,633		$	(49,900	)	$	(11,967	)
Total realized/unrealized gains (losses):
Included in earnings	—			—			(964		)
Included in other comprehensive income	(17		)	—			—
Settlements	—			16,250			—
Other (1)	—			(411		)	—
Balance, end of period	$	3,616		$	(34,061	)	$	(12,931	)

(1) Other rollforward activity consists of accretion of discount related to the contingent consideration liability.

Redeemable noncontrolling interest is classified as Level 3 in the fair value hierarchy and measured on a recurring basis. Redeemable noncontrolling interest is valued based on a combination of factors, including but not limited to, observable valuation of firms similar to the affiliates, multiples of revenue or profit, unique investment products or performance track records, strength in the marketplace, projected discounted cash flow scenarios, strategic value of affiliates to other entities, as well as unique sources of value specific to an individual firm. The methodology used to fair value these interests is consistent with the industry practice of valuing similar types of instruments. Refer to Note 17, Noncontrolling Interest, for a rollforward of activity for the three months ended March 31, 2015 and 2014.

Level 3 assets measured at fair value on a recurring basis include municipal auction rate securities that are classified in securities available-for-sale, a contingent consideration asset and equity warrants classified as derivative assets. Municipal auction rate securities were valued using an average yield on California variable rate notes that were comparable in credit rating and maturity to the securities held, plus a liquidity premium. The contingent consideration asset represents the fair value of future payments to be received on the sale of the Company’s retirement services recordkeeping business. The fair value of contingent consideration was determined by discounting the expected future cash flows using a bond rate for an investment grade finance company. Equity warrants in private companies obtained in association with certain loan transactions are measured at fair value on a recurring basis using the Black-Scholes option pricing model. Key inputs to the valuation model include current share estimated fair value, strike price, volatility, expected life, risk-free interest rate, and market and liquidity discounts. Several of the inputs to the valuation model incorporate assumptions by management that are not observable in the market; consequently, the valuation of warrants is classified in Level 3 of the fair value hierarchy. Refer to Note 11, Derivative Instruments, for additional discussion of equity warrants.

Level 3 liabilities measured at fair value on a recurring basis consist of contingent consideration and an FDIC clawback liability that are included in other liabilities. As part of its acquisition of Rochdale Investment Management, LLC and associated entities (collectively, “Rochdale”), the Company entered into a contingent consideration arrangement that requires the Company to pay additional cash consideration to Rochdale’s former shareholders at certain points in time over the six years after the date of acquisition if certain criteria, such as revenue growth and pre-tax margin, are met. In 2014, the Company made total contingent consideration payments to Rochdale’s former shareholders of approximately $17.4 million. The fair value of the remaining contingent consideration was estimated using a probability-weighted discounted cash flow model. Although the acquisition agreement does not set a limit on the total payment, the Company estimates that the remaining consideration payment could be in the range of $30 million to $53 million, but will ultimately be determined based on actual future results. The contingent consideration liability is remeasured to fair value at each reporting date until its settlement.

The FDIC clawback liability was valued using the discounted cash flow method based on the terms specified in loss-sharing agreements with the FDIC, the actual FDIC payments collected, and the following unobservable inputs: (1) risk-adjusted discount rate reflecting the Bank’s credit risk, plus a liquidity premium, and (2) loan performance assumptions such as prepayments and losses.

There were no transfers into or out of Level 3 assets or liabilities measured on a recurring basis during the three months ended March 31, 2015 and 2014.

Nonrecurring Fair Value Measurements

Assets measured at fair value on a nonrecurring basis using significant unobservable inputs include certain collateral dependent impaired loans, OREO for which fair value is not solely based on market observable inputs, and certain private equity and alternative investments. Private equity and alternative investments do not have readily determinable fair values. These investments are carried at cost and evaluated for impairment on a quarterly basis. Due to the lack of readily determinable fair values for these investments, the impairment assessment is based primarily on a review of investment performance and whether the Company expects to recover the cost of an investment.

The table below provides information about valuation method, inputs and assumptions for nonrecurring Level 3 fair value measurements. The weight assigned to each input is based on the facts and circumstances that exist at the date of measurement.

Information About Nonrecurring Level 3 Fair Value Measurements

(in thousands)	Fair Value at March 31, 2015		Valuation Method	Unobservable Inputs
Other real estate owned	$	6,506	Third-party appraisal	- Fair values are primarily based on unadjusted appraised values. - A limited number of properties were valued using comparable sales values or income approaches, resulting in discounts to appraised values ranging from 34% to 50%.
Private equity and alternative investments	$	1,078	Cost recovery	- Fair values are based on management’s assumptions regarding recoverability of an investment based on fund operating results, investment performance, nature of the investment, market conditions, exit strategies and other relevant factors. - Fair values reflect discounts to investment carrying amounts ranging from 25% to 31%.

For assets measured at fair value on a nonrecurring basis, the following table presents the total net gains and losses, which include charge-offs, recoveries, specific reserves, OREO valuation write-downs and write-ups, gains and losses on sales of OREO, and impairment write-downs on private equity investments, recognized in the three months ended March 31, 2015 and 2014:

	For the three months ended March 31,
(in thousands)	2015			2014
Collateral dependent impaired loans:
Commercial real estate mortgages	$	—		$	(5	)
Other real estate owned (1)	(1,637		)	61
Private equity and alternative investments	(400		)	—
Total net (losses) gains recognized	$	(2,037	)	$	56

(1) Net losses and gains on OREO include amounts related to covered OREO, a significant portion of which is reimbursable by or payable to the FDIC.

Fair Value of Financial Instruments

A financial instrument is broadly defined as cash, evidence of an ownership interest in another entity, or a contract that imposes a contractual obligation on one entity and conveys a corresponding right to a second entity to require delivery or exchange of financial assets or liabilities. Refer to Note 1, Summary of Significant Accounting Policies, in the Company’s 2014 Form 10-K for additional information on fair value measurements.

The disclosure does not include estimated fair value amounts for assets and liabilities which are not defined as financial instruments but which have significant value. These assets and liabilities include the value of customer-relationship intangibles, goodwill, affordable housing investments carried at cost, other assets, deferred taxes and other liabilities. Accordingly, the total of the fair values presented does not represent the underlying value of the Company.

The following tables summarize the carrying amounts and estimated fair values of those financial instruments that are reported at amortized cost in the Company’s consolidated balance sheets. The tables also provide information on the level in the fair value hierarchy for inputs used in determining the fair value of those financial instruments. Most financial assets and financial liabilities for which carrying amount equals fair value are considered by the Company to be Level 1 measurements in the fair value hierarchy.

	March 31, 2015
	Carrying		Total		Fair Value Measurements Using
(in millions)	Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from banks	$	433.7	$	433.7	$	433.7	$	—	$	—
Due from banks - interest-bearing	334.0		334.0		334.0		—		—
Securities purchased under resale agreements	200.0		202.1		—		202.1		—
Securities held-to-maturity	3,413.8		3,510.6		—		3,510.6		—
Loans and leases, net of allowance	20,601.5		21,153.4		—		—		21,153.4
Covered loans, net of allowance	470.5		518.5		—		—		518.5
FDIC indemnification asset	43.3		34.6		—		—		34.6
Investment in FHLB and FRB stock	58.4		58.4		—		58.4		—
Financial Liabilities:
Deposits	$	28,517.1	$	28,518.3	$	—	$	27,849.0	$	669.3
Short-term borrowings	4.4		4.4		—		—		4.4
Long-term debt	634.4		712.8		—		617.6		95.2

	December 31, 2014
	Carrying		Total		Fair Value Measurements Using
(in millions)	Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from banks	$	336.5	$	336.5	$	336.5	$	—	$	—
Due from banks - interest-bearing	120.0		120.0		120.0		—		—
Securities purchased under resale agreements	200.0		201.1		—		201.1		—
Securities held-to-maturity	3,427.0		3,484.6		—		3,484.6		—
Loans and leases, net of allowance	20,027.1		20,576.9		—		—		20,576.9
Covered loans, net of allowance	502.4		549.1		—		—		549.1
FDIC indemnification asset	50.5		40.2		—		—		40.2
Investment in FHLB and FRB stock	58.4		58.4		—		58.4		—
Financial Liabilities:
Deposits	$	28,108.1	$	28,109.6	$	—	$	27,435.1	$	674.5
Short-term borrowings	322.9		322.9		320.0		—		2.9
Long-term debt	638.6		704.3		—		605.3		99.0

Following is a description of the methods and assumptions used in estimating the fair values of these financial instruments:

Cash and due from banks and Due from banks—interest-bearing —  For these short-term instruments, the carrying amount is a reasonable estimate of fair value.

Securities purchased under resale agreements — The fair value of securities purchased under term resale agreements is determined using a combination of quoted market prices and observable market inputs such as interest rates and credit spreads.

Securities held-to-maturity —  For securities held-to-maturity, the fair value is generally determined by quoted market prices, where available, or based on observable market inputs appropriate for the type of security.

Loans and leases —  Loans and leases, excluding covered loans, are not recorded at fair value on a recurring basis.  Nonrecurring fair value adjustments are periodically recorded on impaired loans that are measured for impairment based on the fair value of collateral. Due to the lack of activity in the secondary market for the types of loans in the Company’s portfolio, a model-based approach is used for determining the fair value of loans for purposes of the disclosures in the previous tables. The fair value of loans is estimated by discounting future cash flows using discount rates that incorporate the Company’s assumptions for current market yields, credit risk and liquidity premiums. Loan cash flow projections are based on contractual loan terms adjusted for the impact of current interest rate levels on borrower behavior, including prepayments. Loan prepayment assumptions are based on industry standards for the type of loans being valued. Projected cash flows are discounted using yield curves based on current market conditions. Yield curves are constructed by product type using the Company’s loan pricing model for like-quality credits. The discount rates used in the model represent the rates the Company would offer to current borrowers for like-quality credits. These rates could be different from what other financial institutions could offer for these loans.

Covered loans —  The fair value of covered loans is based on estimates of future loan cash flows and appropriate discount rates, which incorporate the Company’s assumptions about market funding cost and liquidity premium. The future loan cash flows are estimated using the Company’s assumptions concerning the amount and timing of principal and interest payments, prepayments and credit losses.

FDIC indemnification asset —  The fair value of the FDIC indemnification asset is estimated by discounting expected cash flows with appropriate market discount rates.

Investment in FHLB and FRB stock —  Investments in Federal Home Loan Bank of San Francisco (“FHLB”) and Federal Reserve Bank (“FRB”) stock are recorded at cost. Ownership of these securities is restricted to member banks and the securities do not have a readily determinable market value. Purchases and sales of these securities are at par value with the issuer. The fair value of investments in FHLB and FRB stock is equal to the carrying amount.

Deposits —  The fair value of demand and interest checking deposits, savings deposits, and certain money market accounts is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit (“CD”) is determined by discounting expected future cash flows using the rates offered by the Company for deposits of similar type and remaining maturity at the measurement date. This value is compared to the termination value of each CD given the Company’s standard early withdrawal penalties. The fair value reported is the higher of the discounted present value of each CD and the termination value after the recovery of prepayment penalties. The Company reviews pricing for its CD products weekly. This review gives consideration to market pricing for products of similar type and maturity offered by other financial institutions.

Short-term borrowings —  The fair value of nonrecourse debt is determined by discounting expected cash flows with appropriate market discount rates. The carrying amount of the remaining short-term borrowings is a reasonable estimate of fair value.

Long-term debt —  The fair value of long-term debt, excluding nonrecourse debt, is obtained through third-party pricing sources.  The fair value of nonrecourse debt is determined by discounting expected cash flows with appropriate market discount rates.

Off-balance sheet commitments, which include commitments to extend credit, are excluded from the tables. A reasonable estimate of fair value for these instruments is the carrying amount of deferred fees and the reserve for any credit losses related to these off-balance sheet instruments. This estimate is not material to the Company’s financial position.

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Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail 6) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014 item	Dec. 31, 2014
Financing Receivable, Impaired
Impaired loans on accrual status	$ 28,900,000		$ 30,600,000
TDR loans	30,000,000		34,300,000
Specific Reserves	800,000		700,000
Decrease to TDR loans	1,800,000
Charge off to TDR loans	2,600,000
Total Troubled Debt Restructured Loans
Financing Receivable, Impaired
Number of Contracts	1	3
Pre-Modification Outstanding Principal	87,000	4,774,000
Period-End Outstanding Principal	85,000	4,747,000
Commercial
Financing Receivable, Impaired
Number of Contracts		2
Pre-Modification Outstanding Principal		4,098,000
Period-End Outstanding Principal		4,071,000
Variable
Financing Receivable, Impaired
Number of Contracts		1
Pre-Modification Outstanding Principal		676,000
Period-End Outstanding Principal		676,000
Home equity loans and lines of credit
Financing Receivable, Impaired
Number of Contracts	1
Pre-Modification Outstanding Principal	87,000
Period-End Outstanding Principal	$ 85,000

XML

Derivative Instruments (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2015 item	Dec. 31, 2014 item
Derivative
Number of Hedging instruments	0	0
Derivatives not designated as hedging instruments
Derivative
Notional Amount	4,537.2	4,344.7
Derivative Assets	77.1	53.2
Derivative Liabilities	77.4	52.9
Derivatives not designated as hedging instruments | Option contracts
Derivative
Notional Amount	1.8	1.9
Derivative Assets	0.3	0.4
Derivatives not designated as hedging instruments | Interest-Rate Contracts
Derivative
Notional Amount	3,660.0	3,531.8
Derivative Assets	60.2	45.5
Derivative Liabilities	61.4	46.0
Derivatives not designated as hedging instruments | Interest-Rate Swaps
Derivative
Notional Amount	3,221.1	3,094.5
Derivative Assets	59.8	44.7
Derivative Liabilities	61.0	45.2
Derivatives not designated as hedging instruments | Interest Rate Caps, Floors and Collars
Derivative
Notional Amount	438.9	437.3
Derivative Assets	0.4	0.8
Derivative Liabilities	0.4	0.8
Derivatives not designated as hedging instruments | Spot and forward contracts
Derivative
Notional Amount	866.2	802.7
Derivative Assets	15.1	6.1
Derivative Liabilities	16.0	6.6
Derivatives not designated as hedging instruments | Foreign Exchange Contracts
Derivative
Notional Amount	872.2	808.7
Derivative Assets	15.4	6.4
Derivative Liabilities	16.0	6.9
Derivatives not designated as hedging instruments | Foreign Exchange Contracts | Options purchased | Purchase
Derivative
Notional Amount	3.0	3.0
Derivative Assets	0.1	0.1
Derivative Liabilities	0.1	0.1
Derivatives not designated as hedging instruments | Foreign Exchange Contracts | Options purchased | Sale
Derivative
Notional Amount	3.0	3.0
Derivative Assets	0.2	0.2
Derivative Liabilities	0.2	0.2
Equity Warrants | Derivatives not designated as hedging instruments
Derivative
Notional Amount	3.2	2.3
Derivative Assets	1.2	0.9

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2015

Summary of Significant Accounting Policies

Organization

Organization

City National Corporation (the “Corporation”) is the holding company for City National Bank (the “Bank”). The Bank delivers banking, investment and trust services through 75 offices in Southern California, the San Francisco Bay area, Nevada, New York City, Nashville, Tennessee and Atlanta, Georgia. As of March 31, 2015, the Corporation had four consolidated investment advisory affiliates and one unconsolidated subsidiary, Business Bancorp Capital Trust I. Because the Bank comprises substantially all of the business of the Corporation, references to the “Company” mean the Corporation and the Bank together. The Corporation is approved as a financial holding company pursuant to the Gramm-Leach-Bliley Act of 1999.

Consolidation

Consolidation

The consolidated financial statements of the Company include the accounts of the Corporation, its non-bank subsidiaries, the Bank and the Bank’s wholly owned subsidiaries, after the elimination of all material intercompany transactions. It also includes noncontrolling interest, which is the portion of equity in a subsidiary not attributable to a parent. Redeemable noncontrolling interests are noncontrolling ownership interests that are redeemable at the option of the holder or outside the control of the issuer. The redeemable noncontrolling interests of third parties in the Corporation’s investment advisory affiliates are not considered to be permanent equity and are reflected in the mezzanine section between liabilities and equity in the consolidated balance sheets. Noncontrolling interests’ share of subsidiary earnings is reflected as Net income attributable to noncontrolling interest in the consolidated statements of income.

The Company’s investment management and wealth advisory affiliates are organized as limited liability companies. The Corporation generally owns a majority position in each affiliate and certain management members of each affiliate own the remaining shares. The Corporation has contractual arrangements with its affiliates whereby a percentage of revenue is allocable to fund affiliate operating expenses (“operating share”) while the remaining portion of revenue (“distributable revenue”) is allocable to the Corporation and the noncontrolling owners. All majority-owned affiliates that meet the prescribed criteria for consolidation are consolidated. The Corporation’s interests in investment management affiliates in which it holds a noncontrolling share are accounted for using the equity method. Additionally, the Company has various interests in variable interest entities (“VIEs”) that are not required to be consolidated. See Note 16 for a more detailed discussion on VIEs.

Use of Estimates

Use of Estimates

The Company’s accounting and reporting policies conform to generally accepted accounting principles (“GAAP”) and practices in the financial services industry. To prepare the financial statements in conformity with GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and income and expenses during the reporting period. Circumstances and events that differ significantly from those underlying the Company’s estimates and assumptions could cause actual financial results to differ from those estimates. The material estimates included in the financial statements relate to the allowance for loan and lease losses, the reserve for off-balance sheet credit commitments, other real estate owned (“OREO”), valuation of share-based compensation awards, income taxes, goodwill and intangible asset impairment, securities impairment, private equity and alternative investments impairment, valuation of assets and liabilities acquired in business combinations, including contingent consideration liabilities, subsequent valuations of acquired impaired loans, Federal Deposit Insurance Corporation (“FDIC”) indemnification asset, valuation of noncontrolling interest, and the valuation of financial assets and liabilities reported at fair value.

The Company has applied its critical accounting policies and estimation methods consistently in all periods presented in these financial statements. The Company’s estimates and assumptions are expected to change as changes in market conditions and the Company’s portfolio occur in subsequent periods.

Basis of Presentation

Basis of Presentation

The Company is on the accrual basis of accounting for income and expenses. The results of operations reflect any adjustments, all of which are of a normal recurring nature, unless otherwise disclosed in this Form 10-Q, and which, in the opinion of management, are necessary for a fair presentation of the results for the periods presented. In accordance with the usual practice of banks, assets and liabilities of individual trust, agency and fiduciary funds have not been included in the financial statements. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

The results for the 2015 interim periods are not necessarily indicative of the results expected for the full year. The Company has not made any significant changes in its critical accounting policies or in its estimates and assumptions from those disclosed in its 2014 Annual Report other than the adoption of new accounting pronouncements and other authoritative guidance that became effective for the Company on or after January 1, 2015. Refer to Accounting Pronouncements for discussion of accounting pronouncements adopted in 2015.

Certain prior period amounts have been reclassified to conform to the current period presentation.

Accounting Pronouncements

Accounting Pronouncements

The following is a summary of accounting pronouncements that became effective during the three months ended March 31, 2015:

· In January 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-01, Investments—Equity Method and Joint Ventures (Topic 323), Accounting for Investments in Qualified Affordable Housing Projects (“ASU 2014-01”). ASU 2014-01 permits an entity to make an accounting policy election to apply a proportionate amortization method to its low income housing tax credit investments if certain conditions are met. Under the proportionate amortization method, an investor amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received, and recognizes the amortization in the income statement as a component of income taxes attributable to continuing operations. On January 1, 2015, the Company adopted ASU 2014-01 and elected to apply the proportionate amortization method to its low income housing tax credit investments. Following adoption, the Company recognizes amortization of its tax credit investments as a component of income taxes. The Company previously recognized amortization as a component of noninterest expense. Prior periods presented in the Company’s consolidated financial statements have been adjusted to reflect retrospective adoption of ASU 2014-01 as follows:

	Consolidated Balance Sheet
	As of December 31, 2014
(in thousands)	As Reported		As Adjusted
			(Unaudited)
Assets
Deferred tax asset	$	230,376	$	233,811
Affordable housing investments	203,010		186,423
Other assets	537,826		537,847
Shareholders’ equity
Retained earnings	2,084,361		2,071,230

	Consolidated Income Statement
	For the three months ended
	March 31, 2014
(in thousands, except per share amounts)	As Reported		As Adjusted
	(Unaudited)
Noninterest expense
Other operating	$	12,846	$	8,805
Income taxes	26,288		31,010
Net income	55,210		54,529
Net income per common share, basic	$	0.91	$	0.90
Net income per common share, diluted	$	0.90	$	0.89

	Consolidated Statement of Cash Flows
	For the three months ended
	March 31, 2014
(in thousands)	As Reported			As Adjusted
	(Unaudited)
Cash Flows From Operating Activities
Net income .	$	55,210		$	54,529
Adjustments to net income:
Deferred income tax benefit .	(2,679		)	(3,237		)
Other, net	3,720			4,948
Net change in:
Other assets and other liabilities, net	(88,574		)	(88,563		)

· In January 2014, the FASB issued ASU 2014-04, Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40), Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (“ASU 2014-04”). ASU 2014-04 requires entities to reclassify consumer mortgage loans collateralized by residential real estate to OREO when either (1) the creditor obtains legal title to the residential real estate property or (2) the borrower conveys all interest in the property to the creditor to satisfy the loan by completing a deed in lieu of foreclosure or similar agreement. The Company adopted ASU 2014-04 effective January 1, 2015 on a prospective basis. Adoption of the new guidance did not have a significant impact on the Company’s consolidated financial statements.

· In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). ASU 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The Company adopted ASU 2014-08 effective January 1, 2015 on a prospective basis. Adoption of the new guidance did not have a significant impact on the Company’s consolidated financial statements.

· In June 2014, the FASB issued ASU 2014-11, Transfers and Servicing (Topic 860), Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (“ASU 2014-11”). ASU 2014-11 aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other repurchase agreements. Going forward, these transactions will all be accounted for as secured borrowings. Under the new guidance, parties to a repurchase financing transaction will be required to separately account for the initial transfer of the financial asset and the related repurchase agreement. The initial transfer of the financial asset would be accounted for as a sale by the transferor only if all criteria for derecognition have been met. ASU 2014-11 requires new or expanded disclosures for repurchase agreements and similar transactions accounted for as secured borrowings. The Company adopted ASU 2014-11 effective January 1, 2015. Adoption of the new guidance did not have a significant impact on the Company’s consolidated financial statements.

The following is a summary of recently issued accounting pronouncements:

· In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which significantly changes the consolidation analysis required under U.S. GAAP. The new consolidation guidance maintains two models: one for assessing most corporate entities based on the notion that majority voting rights indicate control (the voting model) and another for assessing entities that may be controlled through other means, such as management contracts or subordinated financial support (the variable interest model). Under the new guidance, limited partnerships will be VIEs, unless the limited partners have either substantive kick-out or participating rights. The ASU also changes the effect that fees paid to a decision maker or service provider have on the consolidation analysis. For entities other than limited partnerships, the ASU clarifies how to determine whether the equity holders (as a group) have power over the entity. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is allowed for all entities, but the guidance must be applied as of the beginning of the annual period containing the adoption date. Entities have the option of using either a full or modified retrospective approach for adoption. The Company is assessing the impact of the new guidance on its consolidated financial statements.

· In April 2015, the FASB issued ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires the debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The amendments in this ASU are to be applied on a retrospective basis. Adoption of the new guidance is not expected to have a significant impact on the Company’s consolidated financial statements.

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Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Commitments and Contingencies
Maximum liability under indemnity in connection with liquidation of an investment acquired	$ 23.0
Commitments and Contingencies.
Letters of Credit
Commitments and Contingencies
Commitments and Contingencies.	707.7	718.0
Standby letters of credit, included within letters of credit
Commitments and Contingencies
Commitments and Contingencies.	589.3	607.6
Commercial letters of credit, including within letters of credit
Commitments and Contingencies
Commitments and Contingencies.	$ 118.4	$ 110.4

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Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2015

Derivative Instruments

Summary of notional amount and fair values of derivative instruments

	March 31, 2015						December 31, 2014
(in millions) (1)	Notional Amount		Derivative Assets		Derivative Liabilities		Notional Amount		Derivative Assets		Derivative Liabilities
Derivatives not designated as hedging instruments
Interest rate contracts:
Swaps	$	3,221.1	$	59.8	$	61.0	$	3,094.5	$	44.7	$	45.2
Interest-rate caps, floors and collars	438.9		0.4		0.4		437.3		0.8		0.8
Total interest-rate contracts	3,660.0		60.2		61.4		3,531.8		45.5		46.0
Option contracts	1.8		0.3		—		1.9		0.4		—
Foreign exchange contracts:
Spot and forward contracts	866.2		15.1		15.7		802.7		6.1		6.6
Options purchased	3.0		0.1		0.1		3.0		0.1		0.1
Options written	3.0		0.2		0.2		3.0		0.2		0.2
Total foreign exchange contracts	872.2		15.4		16.0		808.7		6.4		6.9
Equity warrants	3.2		1.2		—		2.3		0.9		—
Total derivatives not designated as hedging instruments	$	4,537.2	$	77.1	$	77.4	$	4,344.7	$	53.2	$	52.9

(1) The Company offsets mark-to-market adjustments, interest receivable, interest payable and cash collateral received on interest-rate swaps that are executed with the same counterparty under a master netting agreement, and reports the net balance in other assets or other liabilities in the consolidated balance sheets. For purposes of this disclosure, mark-to-market adjustments, interest receivable and interest payable are presented on a gross basis and cash collateral is excluded from fair value amounts.

Schedule of the amount of gains and losses on derivative contracts not designated as hedges

(in millions)		For the three months ended
Derivatives Not Designated as	Location in Consolidated	March 31,
Hedging Instruments	Statements of Income	2015			2014
Interest-rate contracts	Other noninterest income	$	(0.7	)	$	(0.5	)
Option contracts	Other noninterest income	(0.1		)	0.1
Foreign exchange contracts (1)	International services income	7.5			7.2
Total income		$	6.7		$	6.8

(1)  Includes spread and translation gains (losses) on foreign exchange spot, forward and option contracts.

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Balance Sheet Offsetting

3 Months Ended

Mar. 31, 2015

Balance Sheet Offsetting

Balance Sheet Offsetting

Note 12. Balance Sheet Offsetting

Assets and liabilities relating to certain financial instruments, including derivatives, securities purchased under resale agreements (“reverse repurchase agreements”) and securities sold under repurchase agreements (“repurchase agreements”), may be eligible for offset in the consolidated balance sheet as permitted under accounting guidance. The Company is party to transactions involving derivative instruments that are subject to enforceable master netting arrangements or similar agreements. Under these agreements, the Company may have the right to net settle multiple contracts with the same counterparty. Certain derivative transactions may require the Company to receive or pledge marketable debt securities as collateral based on certain risk thresholds. The Company also enters into reverse repurchase agreements and collateral swap agreements. Under reverse repurchase agreements, the Company has the right to claim securities collateral if the counterparty fails to perform. Collateral swap agreements involve the exchange of securities collateral under simultaneous repurchase and reverse repurchase agreements with the same bank counterparty. These agreements have the same principal amounts, inception dates and maturity dates, and have been offset against each other in the balance sheet as permitted under the netting provisions of ASC Topic 210-20-45, Balance Sheet — Offsetting. Securities swaps totaled $500.0 million at March 31, 2015. At March 31, 2015, the Company had delivered collateral consisting of agency mortgage-backed securities with a fair value of approximately $540.7 million on the repurchase agreement and accepted collateral consisting of corporate and municipal bonds with a fair value of approximately $528.0 million on the reverse repurchase agreement. Securities that have been pledged by counterparties as collateral are not recorded in the Company’s consolidated balance sheet unless the counterparty defaults. Securities that have been pledged by the Company to counterparties continue to be reported in the Company’s consolidated balance sheet unless the Company defaults.

The Company also offers various derivative products to clients and enters into derivative transactions in due course. These derivative contracts are offset by paired trades with unrelated bank counterparties. Certain derivative transactions with clients are not subject to master netting arrangements and have been excluded from the balance sheet offsetting table below.

The following table provides information about financial instruments that are eligible for offset at March 31, 2015 and December 31, 2014:

								Gross Amounts
						Net Amount		Not Offset in the
	Gross		Gross			Presented		Balance Sheet
	Amount		Amount			in the		Securities			Cash			Net
(in thousands)	Recognized		Offset			Balance Sheet		Collateral			Collateral			Amount
March 31, 2015
Financial assets:
Reverse repurchase agreements	$	700,455	$	(500,153	)	$	200,302	$	(200,000	)	$	—		$	302
Derivatives not designated as hedging instruments	15,560		(443		)	15,117		—			(1,891		)	13,226
Total financial assets	$	716,015	$	(500,596	)	$	215,419	$	(200,000	)	$	(1,891	)	$	13,528
Financial liabilities:
Repurchase agreements	$	500,153	$	(500,153	)	$	—	$	—		$	—		$	—
Derivatives not designated as hedging instruments	76,669		(443		)	76,226		(21,068		)	(41,638		)	13,520
Total financial liabilities	$	576,822	$	(500,596	)	$	76,226	$	(21,068	)	$	(41,638	)	$	13,520
December 31, 2014
Financial assets:
Reverse repurchase agreements	$	700,149	$	(500,041	)	$	200,108	$	(200,000	)	$	—		$	108
Derivatives not designated as hedging instruments	7,669		(1,562		)	6,107		—			—			6,107
Total financial assets	$	707,818	$	(501,603	)	$	206,215	$	(200,000	)	$	—		$	6,215
Financial liabilities:
Repurchase agreements	$	500,041	$	(500,041	)	$	—	$	—		$	—		$	—
Derivatives not designated as hedging instruments	51,125		(1,562		)	49,563		(14,654		)	(28,046		)	6,863
Total financial liabilities	$	551,166	$	(501,603	)	$	49,563	$	(14,654	)	$	(28,046	)	$	6,863