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It therefore seems appropriate
in this year’s report to place particular emphasis on
representatives of the superb talent found throughout
our organization, which has almost doubled in size while
our assets have more than quadrupled during the past
seven and a half years. We have worked to build, develop,
retain and reward the outstanding team of remarkable
men and women who deliver upon our promise of trusted
advice, strong relationships and complete financial
solutions. Every day they apply the skill and expertise
needed to grow our unique brand of business and personal
banking.
In 2002, this organization again
created value by continuing to execute the eight
long-standing strategies that we discussed in last year’s
report:
- Retaining and broadening relationships
with our clients;
- Increasing the number of our
top-tier client relationships;
- Growing noninterest income;
- Making focused and disciplined
acquisitions;
- Emphasizing credit quality
and risk management;
- Enhancing productivity by utilizing
technology and controlling costs;
- Investing in the talent and
leadership capabilities of our colleagues; and
- Maintaining a clear commitment
to integrity and strong corporate values.
As this year’s report makes clear,
our performance in 2002 created a stronger foundation
for years to come.
Financial Highlights
For the entire financial services
industry, 2002 presented a number of formidable challenges.
Uncertain economic conditions, softer loan demand, credit
quality concerns and low interest rates placed continuing
pressure on earnings growth.Yet City National grew net
income 15 percent year-over-year on a comparable basis,
which adjusts prior-year results for the new accounting
standards for goodwill amortization.
In 2002, net income rose to $183.1
million, bringing our five-year compounded annual growth
rate to 17 percent. Earnings per share reached $3.56,
a 10.6 percent increase over the previous year’s comparable
figure of $3.22.
Net interest income on a fully
taxable-equivalent basis increased 18 percent to $530.1 million,
reflecting the solid growth of average loans and average
deposits. Lower-cost average core deposits rose a remarkable
32 percent.
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