UPDATE 1-City National exits TARP program

Thu Mar 4, 2010 9:43am EST

* Buys back remaining $200 mln of preferred shares

* Sees charge of $0.07/shr

* Says to talk with Treasury to buy back warrants

March 4 (Reuters) - City National Corp (CYN.N) said it repurchased $200 million of the preferred shares it sold to the U.S. Treasury under the Troubled Asset Relief Program (TARP), completely exiting the federal bailout, and joining a wave of U.S. banks that avoid curbs on executive compensation.

The Los Angeles bank, which paid back half of the total funds it received under TARP in December, said it will take a one-time related charge of 7 cents per share.

In December last, the company, which offers banking, investment and trust services, said it will buy back the remaining $200 million of its government-held preferred securities in 2010. [ID:nSGE5BT0DE] The U.S. Treasury came out with the $700 billion TARP last year. The Treasury has invested in more than 600 banks under the program, aimed at increasing lending.

However, many firms want to exit the program soon to avoid the related restrictions on executive compensation and dividend payouts, as well as to avoid immense public scrutiny.

The company said it remains well-capitalized after the repurchase of TARP preferred securities with its tier 1 capital ratio at 8.9 percent.

City National said it also plans to repurchase the warrants the U.S. Treasury holds currently.

Shares of the company pared early gains and were down 4 cents at $49.83 in morning trade on the New York Stock Exchange. (Reporting by Archana Shankar in Bangalore; Editing by Gopakumar Warrier)

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