LOS ANGELES, Apr 19, 2006 (BUSINESS WIRE) - City National Corporation (NYSE:CYN), the parent companyof wholly-owned City National Bank, today reported an increase in netincome to $57.2 million, or $1.12 per share, compared with $55.5million, or $1.09 per share, for the first quarter of 2005.

Lending and fee income continued to grow solidly and creditquality was excellent. At the same time, deposits were just slightlyhigher than the first quarter of 2005 but lower than expected, in partbecause of a general slowdown in the real estate industry thataffected title and escrow balances. First-quarter results also reflectsignificant seasonal expense variations and new costs associated withthe treatment of stock options. City National's management has revisedits previously announced expectation of 9 percent to 12 percentearnings per share growth for 2006, and now expects earnings per shareto grow between 8 percent and 10 percent for the year.

FIRST-QUARTER HIGHLIGHTS

-- Revenue totaled $207.3 million, a 5 percent increase from the first quarter of 2005.

-- Average loans grew to $9.6 billion, up 12 percent from the first quarter of last year. This growth was led by increases in commercial loans and residential mortgages.

-- Loan recoveries again exceeded charge-offs, and nonaccrual loans were reduced to $14.6 million, down 51 percent from the first quarter of 2005. The company required no provision for credit losses and remained well reserved at 1.64 percent of total loans.

-- Average deposits of $11.6 billion were just slightly higher than the first quarter of 2005 and down 3 percent from the fourth quarter of last year.

-- Noninterest income grew to $54.9 million, up 9 percent from the first quarter of 2005. The increase was led by the growth of trust, investment and brokerage fee income, as assets under management or administration topped $40 billion for the first time. International services fee income grew 23 percent from the first quarter of last year.

"In the first quarter, commercial lending and noninterest incomegrew strongly and credit quality remained excellent," said Presidentand Chief Executive Officer Russell Goldsmith. "Although deposits weresomewhat less than anticipated, our overall business and progressadding new clients, growing revenue and building momentum for the yearahead positions City National for another successful year. The quarterwas also highlighted by our agreement to add Independence Investmentsto our excellent team of asset management affiliates and by Standardand Poor's decision to upgrade City National Bank's long-term creditrating to A."

For the three months ended March 31,Dollars in millions, --------------------- %except per share 2006 2005 Change----------------------------------------- ---------- ---------- ------Earnings Per Share $1.12 $1.09 3Net Income 57.2 55.5 3Average Assets 14,826.5 13,873.4 7Return on Average Assets 1.57% 1.62% (3)Return on Average Equity 15.68 16.63 (6)

ASSETS

Total assets at March 31, 2006 reached $14.7 billion, up 6 percentfrom one year ago and 1 percent from the fourth quarter of 2005. Theseincreases reflect City National's robust loan growth in the firstquarter of this year.

REVENUE

Loan growth and rising interest rates also drove revenue higher.First-quarter revenue (net interest income plus noninterest income)increased 5 percent to $207.3 million.

NET INTEREST INCOME

Fully taxable-equivalent net interest income reached $155.5million in the first quarter of 2006, up 4 percent from $149.9 millionfor the same period last year. Fully taxable-equivalent net interestincome in the fourth quarter of 2005 was $163 million.

First-quarter loans grew significantly. Average balances reached$9.6 billion, up 12 percent from one year ago and 5 percent from thefourth quarter of 2005. Commercial loans increased 24 percent from thefirst quarter of 2005 and 8 percent from the fourth quarter of lastyear. Residential mortgage lending rose 13 percent from one year agoand 2 percent from the fourth quarter. Commercial mortgage lending wasup 1 percent from the first quarter of 2005 and 2 percent from thefourth quarter. Real estate construction loans declined 9 percent fromone year ago, but grew 2 percent from the fourth quarter of last year.

Higher asset yields also contributed to first-quarter net interestincome growth. City National's yield on earning assets reached 5.98percent, up from 5.43 percent in the first quarter of 2005. At March31, 2006, the bank's prime rate was 7.75 percent, 200 basis pointshigher than it was at the same time last year.

Average deposits totaled $11.6 billion, just slightly higher thanthe first quarter of 2005 but down 3 percent, or $412 million, fromthe fourth quarter of last year.

City National's deposit balances typically reach seasonally highlevels in the fourth quarter and then subside in January. In the firstquarter of this year, they declined more than usual. Average specialtydeposits, which include title and escrow balances and typically varyaccording to conditions in the real estate market, amounted to $1.2billion in the first quarter of 2006, compared with $1.5 billion ayear ago and in the fourth quarter of 2005. While the total number ofCity National clients increased in the first quarter, commercial andprivate banking deposits also were lower than expected, as someclients redeployed excess balances in response to higher interestrates. Deposits picked up at the end of March and period-end balanceswere $321 million higher than the average for the first quarter of2006.

The company's first-quarter net interest margin was 4.62 percent,compared with 4.75 percent during the same period last year and 4.85percent in the fourth quarter of 2005. Lower-than-expected averagecore deposits, which include specialty deposits, were the principalfactor in the decline of the net interest margin from the fourthquarter.

Average securities totaled $4 billion in the first quarter of2006, down 4 percent from one year ago and 2 percent from the fourthquarter of 2005. The average duration of total available-for-salesecurities at March 31, 2006 was 3.2 years, compared with 3.0 years atDecember 31, 2005.

For the three months ended March 31, ------------------ %Dollars in millions 2006 2005 Change-------------------------------------------- ------------------ ------Average Loans $9,625.0 $8,572.3 12Average Securities 3,970.5 4,115.4 (4)Average Deposits 11,587.6 11,572.4 0Average Core Deposits 10,334.0 10,628.3 (3)Fully Taxable-EquivalentNet Interest Income 155.5 149.9 4Net Interest Margin 4.62% 4.75% (3)

NONINTEREST INCOME

First-quarter 2006 noninterest income was $54.9 million, 9 percenthigher than the first quarter of 2005, due primarily to the continuinggrowth of City National's wealth management and internationalbusinesses.

Wealth Management

Trust and investment fees increased 10 percent over the firstquarter of 2005, due primarily to higher balances under management oradministration. Assets under management at March 31, 2006 were 18percent higher than at the end of the first quarter last year, largelyon account of new business, a strong relative investment performanceand higher market values. Increases in market values are reflected infee income primarily on a trailing-quarter basis.

On March 24, City National announced plans to acquire IndependenceInvestment LLC, a Boston-based firm that manages $7.5 billion inassets for corporate, public and Taft-Hartley pension plans, as wellas foundations and endowments. City National expects this acquisitionto close in the second quarter and to become modestly accretive toearnings in the second half of 2006. The acquisition is expected tobring City National's assets under management or administration tomore than $47 billion, on a pro-forma basis.

Other Noninterest Income

First-quarter cash management and deposit transaction fee incomefell 10 percent from the same period last year, as many clients paidfor services with compensating deposit balances. Cash management anddeposit fee income increased 3 percent from the fourth quarter of2005, due to payments from clients that settle on an annual basis aswell as increased sales and the addition of new clients.

International service fee income grew 23 percent from the firstquarter of last year, largely because of an increase in foreignexchange revenue. Fee income for international services fell 4 percentfrom the fourth quarter, as trade finance returned to more normallevels after the 2005 holiday season.

Other service charges and fees for the first quarter of 2006amounted to $5.8 million, up 3 percent from one year ago, but down 12percent from the fourth quarter of 2005. (The fourth-quarter 2005total included a one-time gain of $1.1 million.)

March 31, ------------------- %Dollars in millions 2006 2005 Change------------------------------------------- --------- --------- ------Trust and Investment Fee Revenue $21.8 $19.8 10Brokerage and Mutual Fund Fees 11.7 9.9 18Assets Under Management (1) 19,246.3 16,378.8 18Assets Under ManagementOr Administration 40,435.8 35,829.2 13(1) Excludes $9.4 billion and $6.1 billion of assets under management for the CCM asset managers in which City National holds minority ownership interests as of March 31, 2006 and March 31, 2005, respectively.

NONINTEREST EXPENSE

First-quarter 2006 noninterest expense amounted to $115.3 million,up 6 percent from the first quarter of 2005 and 1 percent from thefourth quarter.

Staffing costs amounted to $71.6 million, up 7 percent from oneyear ago and 8 percent from the fourth quarter of 2005. First-quarterstaffing expenses reflect higher seasonal employer taxes. For thefirst time, expenses also included $1.6 million for stock options. Notincluding this new accounting treatment of stock options,first-quarter staffing expenses grew approximately 5 percent both fromone year ago and from the fourth quarter of 2005.

City National's efficiency ratio for the first quarter of 2006 was54.80 percent, compared with 54.10 percent one year ago and 52.86percent for the fourth quarter of 2005.

INCOME TAXES

The company's first-quarter 2006 effective tax rate was 37.8percent, compared with 37.3 percent in the first quarter of 2005.

CREDIT QUALITY

Asset quality remains strong. At March 31, 2006, nonaccrual loanswere $14.6 million, compared with $29.9 million at the same time lastyear and $14.4 million in the fourth quarter of 2005. Recoveriesexceeded charge-offs by $2.7 million, and for the 11th consecutivequarter, City National made no provision for credit losses. Thisdecision reflected management's assessment of asset quality, loangrowth and favorable economic conditions. The company currentlyexpects to record some provision for loan losses in 2006, although,due to higher-than-expected first-quarter net recoveries, it willlikely be lower than initially anticipated.

At March 31, 2006, the allowance for loan losses was $156.5million, or 1.64 percent of outstanding loans. The reserve forunfunded credit commitments was an additional $15.8 million.

FIRST-QUARTER EARNINGS AND OUTLOOK

While management expected first-quarter earnings to be lower thanfourth-quarter 2005 earnings per share of $1.21 due to seasonaldeposit variations, employer taxes, the requirement to expense stockoptions and fewer days in the quarter, actual first-quarter earningsreflected the added impact of lower-than-expected deposit balances.Overall, balances appear to have stabilized, and management expectsthem to grow slowly through the rest of this year.

City National's management has revised its previously announcedexpectation of 9 percent to 12 percent earnings per share growth for2006, and now expects earnings per share to grow between 8 percent and10 percent for the year.

CAPITAL RATIOS

Total risk-based capital and Tier 1 risk-based capital ratios atMarch 31, 2006 were 15.51 percent and 12.36 percent, compared with theminimum "well capitalized" capital ratios of 10 percent and 6 percent,respectively. The company's Tier 1 leverage ratio at March 31, 2006was 8.92 percent. Total risk-based capital, Tier 1 risk-based capitaland the Tier 1 leverage ratios at December 31, 2005 were 15.53percent, 12.33 percent and 8.82 percent, respectively.

The period-end ratio of shareholders' equity to total assets atMarch 31, 2006 was 10.04 percent, compared to 9.49 percent as of March31, 2005, and 10.00 percent at December 31, 2005.

The accumulated other comprehensive loss at March 31, 2006 was$73.2 million, compared with a loss of $43.3 million at March 31, 2005and $51.6 million at December 31, 2005.

STOCK REPURCHASE AND DIVIDEND

During the first quarter of 2006, City National repurchased 41,200of outstanding shares at an average cost of $73.64. The company iscurrently authorized to repurchase as many as 337,800 additionalshares. There were 826,230 treasury shares at March 31, 2006.

For the 11th consecutive year, City National also increased itsannual dividend. On January 19, 2005, the company raised its commonstock cash dividend 14 percent to $1.64 per share.

CONFERENCE CALL

City National Corporation will host a conference call thisafternoon to discuss results for the first quarter of 2006. The callwill begin at 2:00 p.m. PDT. Analysts and investors may dial in andparticipate in the question/answer session. To access the call, pleasedial (866) 202-1971 and enter pass code 86541110. A listen-only livebroadcast of the call also will be available on the investor relationspage of the company's Website at http://www.cnb.com. There, it will bearchived and available for 12 months.

ABOUT CITY NATIONAL

City National Corporation is a financial services company with$14.7 billion in total assets. Its wholly-owned subsidiary, CityNational Bank, is California's Premier Private and Business Bank(R).City National provides banking, investment and trust services through55 offices, including 12 full-service regional centers, in SouthernCalifornia, the San Francisco Bay Area and New York City. The companyand its affiliates manage or administer more than $40 billion inclient trust and investment assets, including more than $19 billionunder direct management. The pending acquisition of IndependenceInvestment LLC is expected to increase City National's assets undermanagement or administration to more than $47 billion, on a pro formabasis.

FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements about thecompany, for which the company claims the protection of the safeharbor provisions contained in the Private Securities LitigationReform Act of 1995.

Forward-looking statements are based on management's knowledge andbelief as of today and include information concerning the company'spossible or assumed future financial condition, and its results ofoperations, business and earnings outlook. These forward-lookingstatements are subject to risks and uncertainties. A number offactors, some of which are beyond the company's ability to control orpredict, could cause future results to differ materially from thosecontemplated by such forward-looking statements. These factors include(1) changes in interest rates, (2) significant changes in banking lawsor regulations, (3) increased competition in the company's markets,(4) other-than-expected credit losses due to real estate cycles orother economic events, (5) earthquake or other natural disastersaffecting the condition of real estate collateral, (6) the effect ofacquisitions and integration of acquired businesses, and (7) theimpact of changes in regulatory, judicial or legislative tax treatmentof business transactions. Management cannot predict at this time thestrength of the economy, and a slowing or reversal could adverselyaffect our performance in a number of ways including decreased demandfor our products and services and increased credit losses. Likewise,changes in deposit interest rates, among other things, could slow therate of growth or put pressure on current deposit levels.Forward-looking statements speak only as of the date they are made,and the company does not undertake to update forward-lookingstatements to reflect circumstances or events that occur after thedate the statements are made, or to update earnings guidance includingthe 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 endedDecember 31, 2005 and particularly Part I, Item 1A, titled "RiskFactors."

CITY NATIONAL CORPORATIONFINANCIAL HIGHLIGHTS(unaudited) Three Months ----------------------------For The Period Ended March 31, 2006 2005 % Change------------------------------ ----------------------------Per Common Share Net Income Basic $1.16 $1.13 3 Diluted 1.12 1.09 3 Dividends 0.41 0.36 14 Book value 29.87 26.97 11Results of Operations: (in millions) Interest income $198 $168 18 Interest expense 46 21 116 --------- -------- Net interest income 152 146 4 Net interest income (Fully tax- equivalent) 156 150 4 Total revenue 207 197 5 Provision for credit losses - - - Net income 57 55 3Financial Ratios: Performance Ratios: Return on average assets 1.57% 1.62% Return on average shareholders' equity 15.68 16.63 Period-end shareholders' equity to period-end assets 10.04 9.49 Net interest margin 4.62 4.75 Efficiency ratio 54.80 54.10 Capital Adequacy Ratios (Period end): Tier 1 leverage 8.92 8.12 Tier 1 risk-based capital 12.36 11.69 Total risk-based capital 15.51 15.27Asset Quality Ratios: Allowance for loan losses to: Total loans 1.64% 1.72% Nonaccrual loans 1,075.11 493.37 Nonperforming assets to: Total loans and nonperforming assets 0.15 0.35 Total assets 0.10 0.21 Net (charge-offs)/recoveries to Average total loans (annualized) 0.11 0.01Average Balances: (in millions) Loans $9,625 $8,572 12 Interest-earning assets 13,652 12,786 7 Assets 14,827 13,873 7 Core deposits 10,334 10,628 (3) Deposits 11,588 11,573 - Interest-bearing liabilities 7,367 6,652 11 Shareholders' equity 1,481 1,352 10Period-End Balances: (in millions) Loans $9,567 $8,573 12 Assets 14,739 13,918 6 Core deposits 10,489 10,861 (3) Deposits 11,909 11,763 1 Shareholders' equity 1,480 1,320 12Wealth Management: (in millions) (1) Assets under management $19,246 $16,379 18 Assets under management or administration 40,436 35,829 13 (1) Excludes $9,431 million and $6,071 million of assets under management for the Convergent Capital Management asset managers in which City National holds minority ownership interests as of March 31, 2006 and March 31, 2005, respectively.CITY NATIONAL CORPORATIONCONSOLIDATED STATEMENTS OF INCOME(unaudited) Three Months Ended March 31,(Dollars in thousands ----------------------------- except per share data) 2006 2005 % Change------------------------ -----------------------------Interest income $198,192 $167,650 18Interest expense 45,786 21,224 116 --------- --------- Net Interest Income 152,406 146,426 4Provision for Credit Losses - - -Noninterest Income Trust and investment fees 21,774 19,844 10 Brokerage and mutual fund fees 11,684 9,877 18 Cash management and deposit transaction fees 8,064 9,010 (10) International services 5,989 4,888 23 Bank-owned life insurance 934 864 8 Other service charges and fees 5,777 5,597 3 Gain on sale of assets - 23 (100) Gain on sale of securities 708 255 178 --------- --------- Total noninterest income 54,930 50,358 9Noninterest Expense Salaries and employee benefits 71,616 66,632 7 Net occupancy of premises 9,012 7,616 18 Legal and professional fees 9,417 8,714 8 Information services 4,456 4,211 6 Depreciation 4,660 4,570 2 Amortization of intangibles 1,891 1,441 31 Marketing and advertising 4,016 3,574 12 Office services 2,691 2,489 8 Equipment 632 549 15 Minority interest expense 1,228 1,811 (32) Other 5,704 6,708 (15) --------- --------- Total noninterest expense 115,323 108,315 6 --------- ---------Income Before Taxes 92,013 88,469 4Applicable Income Taxes 34,781 33,008 5 --------- ---------Net Income $57,232 $55,461 3 ========= =========Other Data: Earnings per common share - basic $1.16 $1.13 3 Earnings per common share - diluted $1.12 $1.09 3 Dividends paid per common share $0.41 $0.36 14 Dividend payout ratio 35.65% 32.02% 11 Return on average assets 1.57% 1.62% (3) Return on average shareholders' equity 15.68% 16.63% (6) Net interest margin (Fully taxable- equivalent) 4.62% 4.75% (3) Full-time equivalent employees 2,570 2,445 5CITY NATIONAL CORPORATIONCONSOLIDATED QUARTERLY STATEMENTS OF INCOME(unaudited) 2006 2005 ------------ ------------(Dollars in thousands First Fourth except per share data) Quarter Quarter------------------------ ------------ ------------Interest Income $198,192 $191,927Interest Expense 45,786 31,886 ------------ ------------ Net Interest Income 152,406 160,041Provision for Credit Losses - -Noninterest Income Trust and investment fees 21,774 20,362 Brokerage and mutual fund fees 11,684 11,174 Cash management deposit transaction fees 8,064 7,842 International services 5,989 6,256 Bank-owned life insurance 934 670 Other service charges and fees 5,777 6,591 Gain on sale of assets - 81 Gain (loss) on sale of securities 708 (53) ------------ ------------ Total noninterest income 54,930 52,923Noninterest Expense Salaries and employee benefits 71,616 66,460 Net occupancy of premises 9,012 10,074 Legal and professional fees 9,417 11,419 Information services 4,456 4,299 Depreciation 4,660 4,778 Amortization of intangibles 1,891 1,865 Marketing and advertising 4,016 4,472 Office services 2,691 2,942 Equipment 632 582 Minority interest expense 1,228 571 Other 5,704 6,690 ------------ ------------ Total noninterest expense 115,323 114,152Income Before Taxes 92,013 98,812Applicable Income Taxes 34,781 37,055 ------------ ------------Net Income $57,232 $61,757 ============ ============Other Data: Earnings per common share - basic $1.16 $1.25 Earnings per common share - diluted 1.12 1.21 Dividends paid per common share 0.41 0.36 Dividend payout ratio 35.65% 28.89% Return on average assets 1.57% 1.69% Return on average shareholders' equity 15.68% 17.15% Net interest margin (Fully taxable- equivalent) 4.62% 4.85% Full-time equivalent employees 2,570 2,539CITY NATIONAL CORPORATIONCONSOLIDATED QUARTERLY STATEMENTS OF INCOME(unaudited)(Dollars in thousands except per share data) 2005 ------------------------------------------------- Fourth Third Second First Full Quarter Quarter Quarter Quarter Year------------------- --------- --------- --------- --------- ---------Interest Income $191,927 $184,710 $174,265 $167,650 $718,552Interest Expense 31,886 28,396 24,619 21,224 106,125 --------- --------- --------- --------- --------- Net Interest Income 160,041 156,314 149,646 146,426 612,427Provision for Credit Losses - - - - -Noninterest Income Trust and investment fees 20,362 20,494 20,119 19,844 80,818 Brokerage and mutual fund fees 11,174 10,946 9,931 9,877 41,927 Cash management deposit transaction fees 7,842 8,370 8,874 9,010 34,096 International services 6,256 6,107 5,908 4,888 23,159 Bank-owned life insurance 670 1,017 652 864 3,203 Other service charges and fees 6,591 5,573 4,869 5,597 22,632 Gain on sale of assets 81 801 162 23 1,067 Gain (loss) on sale of securities (53) 241 844 255 1,287 --------- --------- --------- --------- --------- Total noninterest income 52,923 53,549 51,359 50,358 208,189Noninterest Expense Salaries and employee benefits 66,460 66,467 63,839 66,632 263,398 Net occupancy of premises 10,074 8,666 8,727 7,616 35,083 Legal and professional fees 11,419 10,672 10,791 8,714 41,596 Information services 4,299 4,471 4,015 4,211 16,996 Depreciation 4,778 4,551 4,535 4,570 18,434 Amortization of intangibles 1,865 1,852 1,441 1,441 6,595 Marketing and advertising 4,472 4,182 3,943 3,574 16,171 Office services 2,942 2,578 2,688 2,489 10,697 Equipment 582 578 646 549 2,355 Minority interest expense 571 1,761 1,532 1,811 5,675 Other 6,690 6,862 6,796 6,708 27,060 --------- --------- --------- --------- --------- Total noninterest expense 114,152 112,640 108,953 108,315 444,060 --------- --------- --------- --------- ---------Income Before Taxes 98,812 97,223 92,052 88,469 376,556Applicable Income Taxes 37,055 37,413 34,345 33,008 141,821 --------- --------- --------- --------- ---------Net Income $61,757 $59,810 $57,707 $55,461 $234,735 ========= ========= ========= ========= =========Other Data: Earnings per common share - basic $1.25 $1.22 $1.18 $1.13 $4.77 Earnings per common share - diluted $1.21 $1.17 $1.13 $1.09 $4.60 Dividends paid per common share $0.36 $0.36 $0.36 $0.36 $1.44 Dividend payout ratio 28.89% 29.82% 30.86% 32.02% 30.35% Return on average assets 1.69% 1.66% 1.65% 1.62% 1.66% Return on average shareholders' equity 17.15% 16.74% 17.03% 16.63% 16.89% Net interest margin (Fully taxable- equivalent) 4.85% 4.80% 4.74% 4.75% 4.79% Full-time equivalent employees 2,539 2,516 2,477 2,445CITY NATIONAL CORPORATIONCONSOLIDATED PERIOD END BALANCE SHEET(unaudited) First(In thousands) Quarter----------------------------------------------------------------------AssetsCash and due from banks $457,156Federal funds sold -Due from banks - interest-bearing 48,890Securities-available-for-sale 3,850,173Trading account securities 57,353Loans:Commercial 3,735,223Commercial Real estate mortgages 1,854,908Residential mortgages 2,700,966Real estate construction 748,696Equity lines of credit 339,348Installment 188,262 ------------ Total loans 9,567,403 Allowance for loan losses (156,482) ------------ Net loans 9,410,921Premises and equipment, net 84,884Goodwill and other intangibles 283,642Other assets 546,365 ------------Total assets $14,739,384 ============Liabilities:Deposits:Noninterest-bearing $5,945,485Interest-bearing 5,963,044 ------------ Total deposits 11,908,529Federal funds purchased and securitiessold under repurchase agreement 526,920Other short-term borrowed funds 151,522Subordinated debt 269,785Other long-term debt 213,819Minority Interest 25,225Other liabilities 164,020 ------------Total liabilities 13,259,820Shareholders' EquityCommon stock 50,693Additional paid-in capital 399,974Retained earnings 1,158,290Accumulated othercomprehensive loss (73,248)Treasury shares (56,145) ------------Total shareholders' equity 1,479,564 ------------Total liabilities and shareholders' equity $14,739,384 ============CITY NATIONAL CORPORATIONCONSOLIDATED PERIOD END BALANCE SHEET(unaudited) 2005 --------------------------------------------------- Fourth Third Second First(In thousands) Quarter Quarter Quarter Quarter-------------- ------------ ------------ ------------ ------------Assets Cash and due from banks $365,217 $438,786 $406,709 $386,999 Federal funds sold 157,000 185,000 400,000 190,000 Due from banks - interest- bearing 40,803 39,485 34,676 36,982 Securities- available-for- sale 3,999,261 4,030,296 4,057,267 4,018,969 Trading account securities 59,344 42,634 22,337 37,490 Loans: Commercial 3,544,504 3,392,487 3,320,836 3,082,663 Commercial Real estate mortgages 1,821,334 1,816,231 1,816,602 1,848,512 Residential mortgages 2,644,030 2,571,537 2,485,177 2,405,732 Real estate construction 721,890 711,755 724,895 759,090 Equity lines of credit 333,548 317,703 310,101 274,735 Installment 200,296 195,168 212,064 201,821 ------------ ------------ ------------ ------------ Total loans 9,265,602 9,004,881 8,869,675 8,572,553 Allowance for loan losses (153,983) (152,920) (147,930) (147,607) ------------ ------------ ------------ ------------ Net loans 9,111,619 8,851,961 8,721,745 8,424,946 Premises and equipment, net 82,868 76,754 73,169 68,354 Goodwill and other intangibles 284,124 285,553 289,675 291,116 Other assets 481,624 478,975 470,020 463,182 ------------ ------------ ------------ ------------ Total assets $14,581,860 $14,429,444 $14,475,598 $13,918,038 ============ ============ ============ ============Liabilities: Deposits: Noninterest- bearing $6,562,038 $6,345,907 $6,468,339 $6,069,061 Interest- bearing 5,576,434 5,769,807 5,683,869 5,693,563 ------------ ------------ ------------ ------------ Total deposits 12,138,472 12,115,714 12,152,208 11,762,624 Federal funds purchased and securities sold under repurchase agreement 190,190 191,036 204,052 155,645 Other short-term borrowed funds 100,000 26,197 27,678 125 Subordinated debt 275,682 278,076 285,771 280,068 Other long-term debt 219,445 221,168 233,290 224,829 Minority Interest 24,351 24,856 25,400 25,525 Other liabilities 175,712 155,220 146,311 149,039 ------------ ------------ ------------ ------------ Total liabilities 13,123,852 13,012,267 13,074,710 12,597,855Shareholders' Equity Common stock 50,601 50,601 50,640 50,712 Additional paid- in capital 411,389 414,073 415,802 419,505 Retained earnings 1,121,474 1,077,561 1,035,589 995,688 Accumulated other comprehensive income (loss) (51,551) (36,879) (12,948) (43,288) Deferred equity compensation (14,730) (15,784) (16,821) (19,893) Treasury shares (59,175) (72,395) (71,374) (82,541) ------------ ------------ ------------ ------------ Total shareholders' equity 1,458,008 1,417,177 1,400,888 1,320,183 ------------ ------------ ------------ ------------ Total liabilities and shareholders' equity $14,581,860 $14,429,444 $14,475,598 $13,918,038 ============ ============ ============ ============CITY NATIONAL CORPORATIONCREDIT LOSS EXPERIENCE(unaudited) 2006 ------------------- First Year To(Dollars in thousands) Quarter Date---------------------- --------- ---------Allowance for Loan LossesBalance at beginning of period $153,983 $153,983Net (charge-offs)/recoveries: Commercial 1,792 1,792 Commercial real estate mortgages 844 844 Residential mortgages - - Real estate construction 16 16 Equity lines of credit - - Installment 4 4 --------- --------- Total net (charge-offs)/recoveries 2,656 2,656Provision charged to expense - -Provision allocated (to) from reserve for off-balance sheet commitments (157) (157) --------- ---------Balance at end of period $156,482 $156,482 ========= =========Net (Charge-Offs)/Recoveries to Average Total Loans: (annualized) Commercial 0.19% 0.19% Commercial real estate mortgages 0.19% 0.19% Residential mortgage 0.00% 0.00% Real estate construction 0.01% 0.01% Equity lines of credit 0.00% 0.00% Installment 0.01% 0.01% Total loans 0.11% 0.11%Reserve for Off-Balance Sheet Credit CommitmentsBalance at beginning of period $15,596 $15,596 Provision for credit losses 157 157 --------- ---------Balance at end of period $15,753 $15,753 ========= ========= 2005 -------------------------------------------------(Dollars in Fourth Third Second First Full thousands) Quarter Quarter Quarter Quarter Year------------------- --------- --------- --------- --------- ---------Allowance for Loan LossesBalance at beginning of period $152,920 $147,930 $147,607 $148,568 $148,568Net (charge- offs)/recoveries: Commercial 2,085 4,213 1,067 2,117 9,482 Commercial real estate mortgages 7 324 7 (1,893) (1,555) Residential mortgages - - 1 2 3 Real estate construction 15 1,192 71 23 1,301 Equity lines of credit - - 39 1 40 Installment (11) 13 5 (18) (11) --------- --------- --------- --------- --------- Total net (charge- offs)/recoveries 2,096 5,742 1,190 232 9,260Provision charged to expense - - - - -Provision allocated (to) from reserve for off-balance sheet commitments (1,033) (752) (867) (1,193) (3,845) --------- --------- --------- --------- ---------Balance at end of period $153,983 $152,920 $147,930 $147,607 $153,983 ========= ========= ========= ========= =========Net (Charge-Offs)/Recoveries to Average Total Loans: (annualized) Commercial 0.23 % 0.49 % 0.13 % 0.28 % 0.29 % Commercial real estate mortgages 0.00 % 0.07 % 0.00 % (0.41)% (0.09)% Residential mortgage 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Real estate construction 0.01 % 0.65 % 0.04 % 0.01 % 0.17 % Equity lines of credit 0.00 % 0.00 % 0.05 % 0.00 % 0.01 % Installment (0.02)% 0.02 % 0.01 % (0.03)% (0.01)% Total loans 0.09 % 0.25 % 0.05 % 0.01 % 0.10 %Reserve for Off- Balance Sheet Credit CommitmentsBalance at beginning of period $14,563 $13,811 $12,944 $11,751 $11,751 Provision for credit losses 1,033 752 867 1,193 3,845 --------- --------- --------- --------- ---------Balance at end of period $15,596 $14,563 $13,811 $12,944 $15,596 ========= ========= ========= ========= =========CITY NATIONAL CORPORATIONNONPERFORMING ASSETS(unaudited) 2006 2005 --------- ------------------------------------ First Fourth Third Second First(Dollars in thousands) Quarter Quarter Quarter Quarter Quarter---------------------- --------- --------- -------- -------- --------Nonaccrual Loans Commercial $5,642 $5,141 $14,917 $17,982 $25,117 Commercial real estate mortgages 923 923 955 1,543 1,945 Residential mortgages - 294 2,259 1,990 1,990 Real estate construction 7,492 7,650 - - - Equity lines of credit - 21 22 22 212 Installment 498 371 401 624 654 --------- --------- -------- -------- -------- Total nonaccrual loans 14,555 14,400 18,554 22,161 29,918Other Nonperforming Assets - - - - - --------- --------- -------- -------- -------- Total nonperforming assets $14,555 $14,400 $18,554 $22,161 $29,918 ========= ========= ======== ======== ========Loans 90 Days or More Past Due on Accrual Status $- $- $- $103 $807Allowance for loan losses as a percentage of: Nonaccrual loans 1,075.11% 1,069.33% 824.19% 667.52% 493.37% Total nonperforming assets 1,075.11% 1,069.33% 824.19% 667.52% 493.37% Total loans 1.64% 1.66% 1.70% 1.67% 1.72%Nonaccrual loans as a percentage of total loans 0.15% 0.16% 0.21% 0.25% 0.35%Nonperforming assets as a percentage of: Total loans and other nonperforming assets 0.15% 0.16% 0.21% 0.25% 0.35% Total Assets 0.10% 0.10% 0.13% 0.15% 0.21%CITY NATIONAL CORPORATIONAVERAGE BALANCES AND RATES(unaudited) 2006 --------------------------------- First Quarter Year to Date ---------------- ---------------- Average Average Average Average(Dollars in millions) Balance Rate Balance Rate--------------------- -------- ------- -------- -------Assets Interest-earning assets Loans Commercial $3,850 6.62% $3,850 6.62% Commercial real estate mortgages 1,838 7.36 1,838 7.36 Residential mortgages 2,663 5.27 2,663 5.27 Real estate construction 743 8.58 743 8.58 Equity lines of credit 334 7.17 334 7.17 Installment 197 7.41 197 7.41 -------- -------- Total loans 9,625 6.59 9,625 6.59 Due from banks - interest- bearing 44 1.98 44 1.98 Federal funds sold and securities purchased under resale agreements 13 4.32 13 4.32 Securities available-for-sale 3,926 4.47 3,926 4.47 Trading account securities 44 5.26 44 5.26 -------- -------- Total interest-earning assets 13,652 5.98 13,652 5.98 Allowance for loan losses (155) (155) Cash and due from banks 439 439 Other assets 891 891 -------- -------- Total assets $14,827 $14,827 ======== ========Liabilities and Shareholders' Equity Interest-bearing deposits Interest checking accounts $808 0.23 $808 0.23 Money market accounts 3,388 1.81 3,388 1.81 Savings deposits 179 0.37 179 0.37 Time deposits - under $100,000 180 2.95 180 2.95 Time deposits - $100,000 and over 1,254 3.37 1,254 3.37 -------- -------- Total interest-bearing deposits 5,809 1.92 5,809 1.92 Federal funds purchased and securities sold under repurchase agreements 809 4.48 809 4.48 Other borrowings 749 5.09 749 5.09 -------- -------- Total interest-bearing liabilities 7,367 2.52 7,367 2.52 Noninterest-bearing deposits 5,779 5,779 Other liabilities 200 200 Shareholders' equity 1,481 1,481 -------- -------- Total liabilities and shareholders' equity $14,827 $14,827 ======== ========Net interest spread 3.46% 3.46% ====== ======Net interest margin 4.62% 4.62% ====== ======CITY NATIONAL CORPORATIONAVERAGE BALANCES AND RATES(unaudited) 2005 ----------------------------------------------- Fourth Quarter Third Quarter Second Quarter --------------- --------------- --------------- Average Average Average Average Average Average(Dollars in millions) Balance Rate Balance Rate Balance Rate---------------------- ------- ------- ------- ------- ------- -------Assets Interest-earning assets Loans Commercial $3,556 6.49% $3,401 6.21% $3,225 6.06% Commercial real estate mortgages 1,810 7.30 1,804 7.50 1,846 7.02 Residential mortgages 2,603 5.23 2,519 5.24 2,444 5.19 Real estate construction 727 8.36 725 7.98 728 7.37 Equity lines of credit 322 6.77 310 6.10 297 5.70 Installment 192 7.19 204 7.05 208 7.12 ------- ------- ------- Total loans 9,210 6.45 8,963 6.34 8,748 6.13 Due from banks - interest-bearing 44 1.63 41 1.45 37 1.24 Federal funds sold and securities purchased under resale agreements 23 4.23 65 3.70 80 2.76 Securities available-for-sale 4,012 4.37 4,030 4.26 4,034 4.25 Trading account securities 39 5.13 37 3.95 37 3.25 ------- ------- ------- Total interest- earning assets 13,328 5.80 13,136 5.67 12,936 5.50 Allowance for loan losses (153) (151) (148) Cash and due from banks 451 441 443 Other assets 842 830 810 ------- ------- ------- Total assets $14,468 $14,256 $14,041 ======= ======= =======Liabilities and Shareholders' Equity Interest-bearing deposits Interest checking accounts $813 0.21 $795 0.14 $849 0.08 Money market accounts 3,471 1.49 3,507 1.30 3,568 1.15 Savings deposits 186 0.29 196 0.29 199 0.28 Time deposits - under $100,000 189 2.65 183 2.64 181 2.38 Time deposits - $100,000 and over 1,136 2.78 1,074 2.76 897 2.56 ------- ------- ------- Total interest- bearing deposits 5,795 1.56 5,755 1.42 5,694 1.22 Federal funds purchased and securities sold under repurchase agreements 289 3.79 256 3.25 315 2.88 Other borrowings 552 4.55 545 4.13 518 3.85 ------- ------- ------- Total interest- bearing liabilities 6,636 1.91 6,556 1.72 6,527 1.51 Noninterest-bearing deposits 6,205 6,104 5,985 Other liabilities 198 178 170 Shareholders' equity 1,429 1,418 1,359 ------- ------- ------- Total liabilities and shareholders' equity $14,468 $14,256 $14,041 ======= ======= =======Net interest spread 3.89% 3.95% 3.99% ====== ====== ======Net interest margin 4.85% 4.80% 4.74% ====== ====== ====== 2005 -------------------------------- First Quarter Full Year --------------- --------------- Average Average Average Average(Dollars in millions) Balance Rate Balance Rate--------------------- ------- ------- ------- -------Assets Interest-earning assets Loans Commercial $3,112 5.75% $3,325 6.13 % Commercial real estate mortgages 1,818 7.02 1,819 7.21 Residential mortgages 2,354 5.18 2,481 5.21 Real estate construction 817 6.74 749 7.59 Equity lines of credit 265 5.42 299 6.03 Installment 206 6.28 202 6.93 ------- ------- Total loans 8,572 5.98 8,875 6.23 Due from banks - interest-bearing 65 1.34 47 1.42 Federal funds sold and securities purchased under resale agreements 33 2.59 50 3.22 Securities available-for-sale 4,078 4.38 4,038 4.32 Trading account securities 38 2.40 38 3.71 ------- ------- Total interest-earning assets 12,786 5.43 13,048 5.60 Allowance for loan losses (149) (150) Cash and due from banks 441 444 Other assets 795 819 ------- ------- Total assets $13,873 $14,161 ======= =======Liabilities and Shareholders' Equity Interest-bearing deposits Interest checking accounts $858 0.09 $828 0.13 Money market accounts 3,690 1.00 3,558 1.23 Savings deposits 205 0.24 197 0.27 Time deposits - under $100,000 182 2.07 184 2.44 Time deposits - $100,000 and over 944 2.11 1,013 2.57 ------- ------- Total interest-bearing deposits 5,879 1.05 5,780 1.32 Federal funds purchased and securities sold under repurchase agreements 254 2.33 278 3.08 Other borrowings 519 3.53 534 4.03 ------- ------- Total interest-bearing liabilities 6,652 1.29 6,592 1.61 Noninterest-bearing deposits 5,694 5,999 Other liabilities 175 180 Shareholders' equity 1,352 1,390 ------- ------- Total liabilities and shareholders' equity $13,873 $14,161 ======= =======Net interest spread 4.14% 3.99 % ====== ======Net interest margin 4.75% 4.79 % ====== ======CITY NATIONAL CORPORATIONCAPITAL AND CREDIT RATING DATA(unaudited) 2006 2005 ---------------- ---------------------------------------- First Year To Fourth Third Second First Full Quarter Date Quarter Quarter Quarter Quarter Year -------- ------- -------- ------- ------- ------- -------Per Common Share:---------- Shares Outstanding (in thousands): Average - Basic 49,484 49,484 49,238 49,198 49,090 49,162 49,159 Average - Diluted 51,309 51,309 51,053 51,123 51,043 51,030 51,062 Period-End 49,535 49,347 49,117 49,145 48,958Book Value $29.87 $29.55 $28.85 $28.51 $26.97Price: High $78.25 $78.25 $75.12 $76.10 $72.90 $71.35 $76.10 Low 71.95 71.95 66.39 68.42 66.84 67.49 66.39 Period-end 76.79 72.44 70.09 71.71 69.82Capital Ratios (Dollars in millions):--------------Risk-based capital Risk-adjusted assets $10,473 $10,148 $9,802 $9,663 $9,410 Tier I capital $1,295 $1,251 $1,195 $1,151 $1,100 Percentage of risk adjusted assets 12.36% 12.33 12.19% 11.91% 11.69% Total capital $1,624 $1,576 $1,539 $1,493 $1,437 Percentage of risk adjusted assets 15.51% 15.53 15.70% 15.45% 15.27% Tier I leverage ratio 8.92% 8.82 8.58% 8.39% 8.12% Period-end shareholders' equity to total period-end assets 10.04% 10.00 9.82% 9.68% 9.49% Period-end tangible shareholders' equity to total period-end tangible assets 8.27% 8.21 8.00% 7.83% 7.55% Average shareholders' equity to total average assets 9.99% 9.99% 9.88 9.94% 9.68% 9.75% 9.81% Average tangible shareholders' equity to total average tangible assets 8.23% 8.23% 8.07 8.08% 7.77% 7.80% 7.93%Senior Debt Credit Ratings--------------------------For The Period Ended March 31, 2006 Standard & Moody's Fitch Poor's DBRS ------- ----- -------- ------City National Bank A2 A- A ACity National Corporation A3 A- A- A(low)Conference Call: Today 2:00 p.m. PDT 866.202.1971 Pass Code: 86541110

SOURCE: City National Corporation


City National Corporation
Christopher J. Carey, 310-888-6777 (Financial/Investors)
Chris.Carey@cnb.com
Cary Walker, 213-833-4715 (Media)
Cary.Walker@cnb.com