Company Announces 12 Percent Dividend Increase
Average Loans Grow 12 Percent

LOS ANGELES, Jan. 23, 2007 (PRIME NEWSWIRE) - City National Corporation (NYSE:CYN), the parent company of wholly owned City National Bank, today reported 2006 net income of $233.5 million, or $4.66 per share. In 2005, the company earned $4.60 per share on net income of $234.7 million.

Net income in the fourth quarter of 2006 amounted to $58.6 million, or $1.19 per share, compared with $61.8 million, or $1.21 per share, in the fourth quarter of 2005.

City National Corporation also announced that its Board of Directors has increased the company's annual common stock cash dividend to $1.84 per share, up 12 percent from the $1.64 previously paid. A dividend of $0.46 per share will be payable on February 21, 2007 to stockholders of record on February 7, 2007.

This is the 13th consecutive year in which City National Corporation has increased its dividend.

2006 FINANCIAL HIGHLIGHTS

  • Average loan balances rose 12 percent to $9.9 billion.
  • Average deposits totaled $11.9 billion, a 1 percent increase from 2005.
  • Noninterest income reached $242.6 million, up 15 percent from the previous year due to the acquisition of Independence Investments as well as increasing wealth management and international banking services fee revenue.
  • Assets under direct management increased 45 percent to $27.9 billion.
  • Credit quality remained strong. The company required no provision for credit losses, remaining adequately reserved at 1.5 percent of total loans.
  • City National's return on average equity in 2006 was 15.99 percent, compared with 16.89 percent in 2005. The company's return on average assets in 2006 was 1.59 percent, compared with 1.66 percent for the previous year.

"City National's 2006 performance was excellent in every respect, except growth in net income due primarily to the rise in deposit costs and a relatively moderate reduction in our strong net interest margin in this interest rate environment," said Russell Goldsmith, President and Chief Executive Officer of City National Corporation. "Loan growth was strong. Credit quality was outstanding. Noninterest income continued its robust year-over-year growth.

"City National also continued to make meaningful and appropriate investments for its long-term growth. Early in 2006, the company broadened its investment capabilities by acquiring Independence Investments and more recently announced plans to expand into Nevada with the acquisition of Business Bank of Nevada, which should close in the first quarter of 2007. Our talented organization continued to add new client relationships and successfully introduced new products, like City National E-Deposit, that reflect our focus and effectiveness as California's Premier Private and Business Bank. Recognizing City National's quality, strength and value, Bank Director magazine recently ranked the company fourth in a comprehensive performance comparison of America's top 150 banks."

 For the 12 months ended December 31, Dollars in millions, ------------------------ % except per share 2006 2005 Change ---------------------------------- ------------------------ --------- Earnings Per Share $ 4.66 $ 4.60 1 Net Income 233.5 234.7 (1) Average Assets 14,715.5 14,161.3 4 Return on Average Assets 1.59 % 1.66 % (4) Return on Average Equity 15.99 16.89 (5)

ASSETS

Total assets at December 31, 2006 were $14.9 billion, up 2 percent from the previous year.

REVENUE

Revenue grew to $848 million, up 3 percent from 2005, due primarily to the strong growth of noninterest income and loans.

NET INTEREST INCOME

Fully taxable-equivalent net interest income totaled $619 million in 2006, down 1 percent from 2005, due primarily to higher deposit costs.

Average loan balances grew 12 percent in 2006, led by a 17 percent increase in commercial loans and an 11 percent rise in residential mortgage loans. Commercial real estate mortgages increased 8 percent, while construction loans were virtually unchanged.

City National's prime lending rate was 8.25 percent on December 31, 2006, unchanged from September 30, 2006 but up 100 basis points from the end of 2005.

 Dollars in millions 2006 2005 Change ---------------------------- --------------------------- ------- Average Loans $ 9,948.3 $ 8,875.4 12 Average Total Securities 3,489.1 4,029.4 (13) Average Earning Assets 13,522.7 13,001.7 4 Average Deposits 11,869.9 11,778.8 1 Average Core Deposits 10,148.6 10,765.3 (6) Fully Taxable-Equivalent Net Interest Income 618.8 622.5 (1) Net Interest Margin 4.58 % 4.79 % (4)

Average deposits for the year totaled $11.9 billion, a 1 percent increase from the previous year. Average noninterest-bearing deposits fell 4 percent from 2005 but increased 1 percent from the third quarter of 2006. Title and escrow balances averaged $1.26 billion for the year, down from $1.61 billion in 2005 but slightly higher than the third-quarter 2006 total of $1.25 billion. Average interest-bearing deposits increased 6 percent from 2005 and 1 percent from the third quarter of 2006.

The company's net interest margin averaged 4.58 percent in 2006, compared with 4.79 percent in the previous year. This decline was attributable primarily to higher deposit costs.

Average securities for 2006 totaled $3.5 billion, a 13 percent decline from the previous year. At December 31, 2006 the average duration of total available-for-sale securities was 3.3 years. It was 3.0 years at the end of 2005.

NONINTEREST INCOME

Noninterest income reached $242.6 million in 2006, up 15 percent from the previous year, or 7 percent excluding the impact of the second-quarter acquisition of Independence Investments LLC. The increase in 2006 was due largely to the continued growth of City National's wealth management business and international banking services fees.

At year-end 2006, noninterest income accounted for 29 percent of City National's total revenue, up from 25 percent at December 31, 2005.

Wealth Management

Trust and investment fees grew 33 percent in 2006, while fees for brokerage and mutual fund services increased 20 percent. Assets under management increased 45 percent from 2005, due to the Independence acquisition, new business, a strong relative investment performance and higher market values. Increases in market values are reflected in fee income primarily on a trailing-quarter basis.

 At or for the 12 months ended December 31, ------------------------ % Dollars in millions 2006 2005 Change -------------------------------- ----------- ---------- ------ Trust and Investment Fee Revenue $107.5 $ 80.8 33 Brokerage and Mutual Fund Fees 50.4 41.9 20 Assets Under Management (1) 27,859.7 19,256.2 45 Total Assets Under Management or Administration (1) 48,684.2 39,589.0 23 (1) Excludes $9.1 billion and $7.2 billion of assets under management for the investment affiliates in which City National held minority ownership interests as of December 31, 2006 and December 31, 2005, respectively.

Other Noninterest Income

International banking services fees grew 13 percent in 2006, reflecting increased demand for both foreign exchange services and letters of credit. Service charges for deposit accounts fell 7 percent from 2005, due largely to a higher earnings credit for cash management clients who maintain deposit balances to pay for services.

NONINTEREST EXPENSE

Expenses grew 9 percent in 2006. However, they increased only 4 percent excluding the impact of the acquisition of Independence Investments and the new expensing required for stock options in 2006. Implementation of the required accounting change for employee stock options increased City National's noninterest expense by $6.9 million. After tax, it amounted to $4.3 million, or 8 cents per share.

City National's 2006 efficiency ratio was 55.98, compared with 53.30 in 2005. This year-over-year increase was due primarily to lower revenue growth brought about by a shift in deposits as well as stock option expensing and the acquisition of Independence Investments.

CREDIT QUALITY

Asset quality remained strong. Nonaccrual loans at December 31, 2006 totaled $20.9 million, or 20 basis points of total loans. Net loan recoveries in 2006 amounted to $2.8 million.

The company made no provision for credit losses in 2006. This was attributable to management's quantitative and qualitative assessment of asset quality, credit risk, loan growth and economic conditions. At December 31, 2006 the allowance for loan losses was $155.3 million, or 1.5 percent of total loans. The company maintains an additional reserve of $16.4 million for unfunded credit commitments.

INCOME TAXES

City National's effective tax rate was 36.4 percent for the year. That compares with a 37.7 percent rate in 2005. The decline in the effective tax rate was due primarily to a tax-free gain on an investment in liquidation.

FOURTH-QUARTER 2006 HIGHLIGHTS

  • Fourth-quarter revenue grew to $215 million, up 1 percent from both the fourth quarter of 2005 and the third quarter of 2006.
  • Fully tax-equivalent net interest income amounted to $154 million, down 5 percent from the fourth quarter of 2005 but up 1 percent from the third quarter of 2006. The company's net interest margin averaged 4.51 percent in the fourth quarter of 2006, compared with 4.53 percent in the previous quarter.
  • Average loans reached an all-time high of $10.2 billion, up 11 percent from the same period of 2005 and 2 percent from the third quarter of 2006.
  • Average deposits amounted to $12.1 billion in the fourth quarter, $51 million higher than they were in the same period of 2005. Average balances increased 1 percent from the third quarter of 2006.
  • Credit quality remained strong. Nonaccrual loans totaled $20.9 million, or 20 basis points of total loans. Net charge-offs amounted to only $2.9 million, or 11 basis points of total loans.
  • Noninterest income totaled $64 million, up 20 percent from the same period in 2005 but down 1 percent from the third quarter of 2006. Excluding the impact of the Independence acquisition and several unusual items, noninterest income increased 10 percent from the fourth quarter of 2005. In the fourth quarter of 2006, City National realized a tax-free gain of $6.9 million ($11.1 million on a pre-tax equivalent basis) on the recovery of an investment in liquidation, which was partly offset by a loss on the sale of an asset management affiliate. The company also realized investment securities losses of $4.1 million.
  • Noninterest expense increased 11 percent from the fourth quarter of 2005 and 5 percent from the third quarter of 2006. Fourth-quarter 2006 results included an additional $2.5 million of miscellaneous expenses. Excluding the impact of the Independence acquisition and stock option expense, noninterest expense increased 5 percent from the fourth quarter of 2005.
  • The fourth-quarter effective tax rate was 33.5 percent. Excluding the tax-free gain on an investment in liquidation, the company's tax rate was 36 percent, compared with 36.5 percent in the third quarter.

2007 OUTLOOK

Management currently anticipates earnings per share growth of between 3 percent and 5 percent in 2007. Nearly all of City National's key operating metrics - loans, credit quality, noninterest income and noninterest expense management - are expected to reflect a reasonably strong performance this year, with loans growing at a slightly lower rate than they did in 2006. Earnings per share growth will be moderated by the full-year averaging effect of lower deposit levels and higher deposit costs realized in 2006, as well as the likelihood of a modest credit-loss provision in 2007.

City National's pending acquisition of Business Bank of Nevada is scheduled to close during the first quarter of this year, and the acquisition is expected to be neutral to earnings per share in 2007.

CAPITAL LEVELS

City National remains well-capitalized by regulatory standards. Total risk-based capital and Tier 1 risk-based capital ratios at December 31, 2006 were 13.53 percent and 11.01 percent, respectively, compared with the minimum regulatory standards of 10 percent and 6 percent for "well-capitalized" institutions. City National's Tier 1 leverage ratio at December 31, 2006 was 8.74 percent, well above the regulatory minimum ratio of 5 percent.

At September 30, 2006 the total risk-based capital, Tier 1 risk-based capital and Tier 1 leverage ratios were 14.21 percent, 11.18 percent and 8.66 percent, respectively.

The period-end ratio of shareholders' equity to total assets at December 31, 2006 was 9.96 percent, compared with 10.00 percent at the same time in 2005 and 9.98 percent at September 30, 2006.

In the fourth quarter of 2006, City National implemented SEC Staff Accounting Bulletin No. 108. This resulted in a $10.2 million reduction to shareholders' equity to correct cumulative immaterial differences as of January 1, 2006 related to prior years.

STOCK REPURCHASE

In 2006, City National repurchased 2.3 million shares at an average cost of $69.01. The company is currently authorized to buy back an additional 1.1 million shares.

CONFERENCE CALL

City National Corporation will host a conference call this afternoon to discuss 2006 financial results. The call will begin at 2:00 p.m. PST. Analysts and investors may dial in and participate in the question/answer session. To access the call, please dial 800.706.7741 and enter pass code 35592070. A listen-only live broadcast of the call also will be available on the investor relations page of the company's Website at www.cnb.com. It will be archived and available there for 12 months.

ABOUT CITY NATIONAL

City National Corporation's wholly owned subsidiary, City National Bank, provides banking, investment and trust services through 54 offices, including 12 full-service regional centers, in Southern California, the San Francisco Bay Area and New York City. For more information about City National, visit the company's website at www.cnb.com.

THE MERGER OF BUSINESS BANK CORP. INTO CITY NATIONAL CORP.

On November 1, 2006 City National Corporation announced plans to acquire Business Bank Corporation, parent company of the Business Bank of Nevada. City National Corporation and Business Bank Corporation have filed a proxy statement/prospectus and other relevant documents concerning the merger with the United States Securities and Exchange Commission (SEC). WE URGE INVESTORS TO READ THIS PROXY STATEMENT/PROSPECTUS AND ALL OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE MERGER OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENT/PROSPECTUS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION.

Investors can obtain City National Corporation documents free of charge at the SEC's web site (www.sec.gov). In addition, documents filed with the SEC by City National Corporation are available free of charge from the company's Investor Relations Department at (213) 673-7615. Business Bank Corporation stockholder documents are available free of charge from Business Bank Corporation's Investor Relations Department at (702) 952-4415.

The directors, executive officers, and certain other members of management and employees of Business Bank Corporation are participants in the solicitation of proxies in favor of the merger from the stockholders of Business Bank Corporation. Information about the directors and executive officers of Business Bank Corporation is set forth in the proxy statement for its 2006 annual meeting of stockholders, which is available on Business Bank Corporation's website at www.bbnv.com, under the heading "Investor Relations." Additional information regarding the interests of such participants is included in the proxy statement/prospectus and the other relevant documents filed with the SEC.

SAFE-HARBOR LANGUAGE

This news release contains forward-looking statements 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, some 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) changes in interest rates, (2) significant changes in banking laws or regulations, (3) increased competition in the company's markets, (4) other-than-expected credit losses due to business losses, real estate cycles or other economic events, (5) earthquake or other natural disasters affecting the condition of real estate collateral, (6) the effect of acquisitions and integration of acquired businesses and de novo branching efforts, (7) the impact of changes in regulatory, judicial or legislative tax treatment of business transactions, (8) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies, and (9) general business and economic conditions, including movements in interest rates, the slope of the yield curve and changes in business formation and growth, commercial real estate development and real estate prices.

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, 2005 and particularly Part I, Item 1A, titled “Risk Factors.”

 CITY NATIONAL CORPORATION FINANCIAL HIGHLIGHTS (unaudited) For The Period Ended December 31, ---------------------------------------------------- Three Months Twelve Months ------------------------- ------------------------ % % 2006 2005 Change 2006 2005 Change ------------------------- ------------------------ Per Common Share Net Income Basic $ 1.23 $ 1.25 (2) $ 4.82 $ 4.77 1 Diluted 1.19 1.21 (2) 4.66 4.60 1 Dividends 0.41 0.36 14 1.64 1.44 14 Book value 31.18 29.55 6 Results of Operations: (In millions) Interest income $ 214 $ 191 12 $ 826 $ 716 15 Interest expense 63 32 97 220 106 108 ------------------------- ------------------------ Net interest income 151 159 (5) 606 610 (1) Net interest income (Fully tax-equivalent) 154 162 (5) 619 623 (1) Total revenue 215 213 1 848 821 3 Provision for credit losses - -- NM (1) - NM Net income 59 62 (5) 234 235 (1) Financial Ratios: Performance Ratios: Return on average assets 1.58% 1.69% 1.59% 1.66% Return on average shareholders' equity 15.77 17.15 15.99 16.89 Period-end share- holders' equity to period-end assets 9.96 10.00 Net interest margin 4.51 4.85 4.58 4.79 Efficiency ratio 58.21 52.86 55.98 53.30 Capital Adequacy Ratios (Period end): Tier 1 leverage 8.74 8.82 Tier 1 risk- based capital 11.01 12.33 Total risk- based capital 13.53 15.53 Asset Quality Ratios: Allowance for loan and lease losses to: Total loans 1.50% 1.66% Nonaccrual loans 743.88 1,069.33 Nonperforming assets to: Total loans and nonperforming assets 0.20 0.16 Total assets 0.14 0.10 Net (charge-offs)/ recoveries to Average total loans (annualized) (0.11)% 0.09% 0.03% 0.10% Average Balances: (In millions) Loans $10,245 $ 9,210 11 $ 9,948 $ 8,875 12 Interest-earning assets 13,538 13,281 2 13,523 13,002 4 Assets 14,712 14,468 2 14,716 14,161 4 Core deposits 10,081 10,864 (7) 10,149 10,765 (6) Deposits 12,051 12,000 - 11,870 11,779 1 Interest-bearing liabilities 7,310 6,636 10 7,305 6,592 11 Shareholders' equity 1,473 1,429 3 1,461 1,390 5 ------------------------- ------------------------ Period-End Balances: (In millions) Loans $10,386 $ 9,266 12 Assets 14,874 14,582 2 Core deposits 10,326 11,081 (7) Deposits 12,173 12,138 - Shareholders' equity 1,481 1,458 2 Wealth Management: (In millions)(a) Assets under management $27,860 $19,256 45 Assets under management or administration 48,684 39,589 23 (a) Excludes $9.1 and $7.2 billion of assets under management for the Convergent Capital Management asset managers in which City National holds minority ownership interests as of December 31, 2006 and December 31, 2005, respectively. CITY NATIONAL CORPORATION CONSOLIDATED STATEMENTS OF INCOME (unaudited) (Dollars in thousands except per share data) Three Months Ended Twelve Months Ended December 31, December 31, -------------------------- ------------------------ % % 2006 2005 Change 2006 2005 Change ----------------------------------------------------- Interest income $213,551 $191,333 12 $826,294 $716,276 15 Interest expense 62,788 31,886 97 220,405 106,125 108 -------- -------- -------- -------- Net Interest Income 150,763 159,447 (5) 605,889 610,151 (1) Provision for Credit Losses - -- NM (610) - NM Noninterest Income Trust and invest- ment fees 30,777 20,362 51 107,462 80,818 33 Brokerage and mutual fund fees 13,309 11,174 19 50,358 41,927 20 Cash management and deposit transaction fees 7,909 7,842 1 31,631 34,096 (7) International services 6,486 6,256 4 26,174 23,159 13 Bank-owned life insurance 700 670 4 2,996 3,203 (6) Other service charges and fees 6,725 7,185 (6) 25,693 24,908 3 Gain (loss) on sale of assets 2,482 81 2,964 2,750 1,067 158 Gain (loss) on sale of securities (4,130) (53) 7,692 (4,500) 1,287 (450) -------- -------- -------- -------- Total non- interest income 64,258 53,517 20 242,564 210,465 15 Noninterest Expense Salaries and employee benefits 74,499 66,460 12 295,151 263,398 12 Net occupancy of premises 11,562 10,074 15 40,241 35,083 15 Legal and pro- fessional fees 10,025 11,419 (12) 37,731 41,596 (9) Information services 5,138 4,299 20 19,097 16,996 12 Depreciation 4,908 4,778 3 19,062 18,434 3 Amortization of intangibles 1,456 1,865 (22) 5,284 6,595 (20) Marketing and advertising 5,153 4,472 15 18,654 16,171 15 Office services 2,888 2,942 (2) 10,751 10,697 1 Equipment 1,043 582 79 2,812 2,355 19 Minority interest expense 1,709 571 199 5,958 5,675 5 Other 8,632 6,690 29 27,436 27,060 1 -------- -------- -------- -------- Total non- interest expense 127,013 114,152 11 482,177 444,060 9 -------- -------- -------- -------- Income Before Taxes 88,008 98,812 (11) 366,886 376,556 (3) Applicable Income Taxes 29,452 37,055 (21) 133,363 141,821 (6) -------- -------- -------- -------- Net Income $ 58,556 $ 61,757 (5) $233,523 $234,735 (1) ======== ======== ======== ======== Other Data: Earnings per common share - basic $ 1.23 $ 1.25 (2) $ 4.82 $ 4.77 1 Earnings per common share - diluted $ 1.19 $ 1.21 (2) $ 4.66 $ 4.60 1 Dividends paid per common share $ 0.41 $ 0.36 14 $ 1.64 $ 1.44 14 Dividend payout ratio 33.55% 28.89% 16 34.31% 30.35% 13 Return on average assets 1.58% 1.69% (7) 1.59% 1.66% (4) Return on average shareholders' equity 15.77% 17.15% (8) 15.99% 16.89% (5) Net interest margin (Fully taxable- equivalent) 4.51% 4.85% (7) 4.58% 4.79% (4) Full-time equivalent employees 2,670 2,539 5 CITY NATIONAL CORPORATION CONSOLIDATED QUARTERLY STATEMENTS OF INCOME (unaudited) (Dollars in thousands except per share data) 2006 ---------------------------------------------------- Fourth Third Second First Year to Quarter Quarter Quarter Quarter Date -------- -------- -------- -------- -------- Interest Income $213,551 $208,347 $206,204 $198,192 $826,294 Interest Expense 62,788 59,625 52,206 45,786 220,405 -------- -------- -------- -------- -------- Net Interest Income 150,763 148,722 153,998 152,406 605,889 Provision for Credit Losses - -- (610) - (610) Noninterest Income Trust and invest- ment fees 30,777 30,002 24,909 21,774 107,462 Brokerage and mutual fund fees 13,309 13,096 12,269 11,684 50,358 Cash management and deposit transaction fees 7,909 7,967 7,691 8,064 31,631 International services 6,486 6,829 6,870 5,989 26,174 Bank-owned life insurance 700 685 677 934 2,996 Other service charges and fees 6,725 6,303 6,888 5,777 25,693 Gain on sale of assets 2,482 268 - -- 2,750 Gain (loss) on sale of securities (4,130) (362) (716) 708 (4,500) -------- -------- -------- -------- -------- Total non- interest income 64,258 64,788 58,588 54,930 242,564 Noninterest Expense Salaries and employee benefits 74,499 75,318 73,718 71,616 295,151 Net occupancy of premises 11,562 10,207 9,460 9,012 40,241 Legal and pro- fessional fees 10,025 9,120 9,169 9,417 37,731 Information services 5,138 4,932 4,571 4,456 19,097 Depreciation 4,908 4,832 4,662 4,660 19,062 Amortization of intangibles 1,456 (37) 1,974 1,891 5,284 Marketing and advertising 5,153 4,495 4,990 4,016 18,654 Office services 2,888 2,623 2,549 2,691 10,751 Equipment 1,043 514 623 632 2,812 Minority interest expense 1,709 1,808 1,213 1,228 5,958 Other 8,632 6,857 6,243 5,704 27,436 -------- -------- -------- -------- -------- Total non- interest expense 127,013 120,669 119,172 115,323 482,177 -------- -------- -------- -------- -------- Income Before Taxes 88,008 92,841 94,024 92,013 366,886 Applicable Income Taxes 29,452 33,847 35,283 34,781 133,363 -------- -------- -------- -------- -------- Net Income $ 58,556 $ 58,994 $ 58,741 $ 57,232 $233,523 ======== ======== ======== ======== ======== Other Data: Earnings per common share - basic $ 1.23 $ 1.23 $ 1.20 $ 1.16 $ 4.82 Earnings per common share - diluted $ 1.19 $ 1.20 $ 1.16 $ 1.12 $ 4.66 Dividends paid per common share $ 0.41 $ 0.41 $ 0.41 $ 0.41 $ 1.64 Dividend payout ratio 33.55% 33.64% 34.43% 35.65% 34.31% Return on average assets 1.58% 1.61% 1.59% 1.57% 1.59% Return on average share- holders' equity 15.77% 16.30% 16.20% 15.68% 15.99% Net interest margin (Fully taxable- equivalent) 4.51% 4.53% 4.65% 4.62% 4.58% Full-time equivalent employees 2,670 2,672 2,648 2,570 CITY NATIONAL CORPORATION CONSOLIDATED 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 $ 191,333 $ 184,145 $ 173,692 $ 167,106 $ 716,276 Interest Expense 31,886 28,396 24,619 21,224 106,125 --------- --------- --------- --------- --------- Net Interest Income 159,447 155,749 149,073 145,882 610,151 Provision 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 and 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 7,185 6,138 5,442 6,141 24,908 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 53,517 54,114 51,932 50,902 210,465 Noninterest 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 88,469 376,556 Applicable 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% 4.72% 4.75% 4.79% Full-time equivalent employees 2,539 2,516 2,477 2,445 CITY NATIONAL CORPORATION CONSOLIDATED PERIOD END BALANCE SHEET (unaudited) 2006 -------------------------------------------------- Fourth Third Second First (In thousands) Quarter Quarter Quarter Quarter ----------------- ----------- ----------- ----------- ----------- Assets Cash and due from banks $ 423,114 $ 457,396 $ 467,076 $ 457,156 Federal funds sold 127,000 3,300 1,900 - Due from banks - interest-bearing 60,940 65,323 50,416 48,890 Securities- available-for- sale 2,954,372 3,175,230 3,211,590 3,850,173 Trading account securities 147,907 116,870 123,418 57,353 Loans: Commercial 4,084,377 3,782,781 3,738,361 3,698,614 Commercial real estate mortgages 2,064,478 2,066,373 2,032,698 1,891,517 Residential mortgages 2,869,775 2,830,761 2,769,340 2,700,966 Real estate construction 761,593 757,742 723,570 748,696 Equity lines of credit 404,657 384,830 364,312 339,348 Installment 201,125 197,871 193,474 188,262 ----------- ----------- ----------- ----------- Total loans 10,386,005 10,020,358 9,821,755 9,567,403 Allowance for loan and lease losses (155,342) (159,063) (157,580) (156,482) ----------- ----------- ----------- ----------- Net loans 10,230,663 9,861,295 9,664,175 9,410,921 Premises and equipment, net 94,745 88,582 84,802 84,884 Goodwill and other intangibles 287,561 298,471 298,004 283,642 Other assets 548,155 550,291 575,686 546,365 ----------- ----------- ----------- ----------- Total assets $14,874,457 $14,616,758 $14,477,067 $14,739,384 =========== =========== =========== =========== Liabilities: Deposits: Noninterest- bearing $ 6,002,068 $ 5,639,811 $ 5,880,630 $ 5,945,485 Interest- bearing 6,170,748 6,252,206 6,098,200 5,963,044 ----------- ----------- ----------- ----------- Total deposits 12,172,816 11,892,017 11,978,830 11,908,529 Federal funds purchased and securities sold under repurchase agreements 422,903 506,962 234,995 526,920 Other short-term borrowed funds 97,525 72,426 143,724 151,522 Subordinated debt 269,848 270,522 266,675 269,785 Other long-term debt 217,569 217,323 209,864 213,819 Minority interest 28,425 28,578 27,985 25,225 Other liabilities 184,380 170,710 206,929 164,020 ----------- ----------- ----------- ----------- Total liabilities 13,393,466 13,158,538 13,069,002 13,259,820 Shareholders' Equity Common stock 50,719 50,729 50,735 50,693 Additional paid-in capital 402,324 404,163 402,476 399,976 Retained earnings 1,264,697 1,235,959 1,196,812 1,158,290 Accumulated other comprehensive loss (41,386) (46,400) (86,931) (73,250) Treasury shares (195,363) (186,231) (155,027) (56,145) ----------- ----------- ----------- ----------- Total shareholders' equity 1,480,991 1,458,220 1,408,065 1,479,564 ----------- ----------- ----------- ----------- Total liabilities and shareholders' equity $14,874,457 $14,616,758 $14,477,067 $14,739,384 =========== =========== =========== =========== CITY NATIONAL CORPORATION CONSOLIDATED 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 3,952,501 3,983,874 4,010,860 3,972,247 Trading account securities 59,344 42,634 22,337 37,490 Loans: Commercial 3,505,576 3,367,607 3,311,059 3,082,663 Commercial real estate mortgages 1,860,262 1,841,111 1,826,379 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 and lease 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 528,384 525,397 516,427 509,904 ----------- ----------- ----------- ----------- 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 agreements 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 12,597,855 Shareholders' Equity Common stock 50,601 50,601 50,640 50,712 Additional paid-in capital 396,659 398,289 398,981 399,612 Retained earnings 1,121,474 1,077,561 1,035,589 995,688 Accumulated other comprehensive loss (51,551) (36,879) (12,948) (43,288) 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 CORPORATION CREDIT LOSS EXPERIENCE (unaudited) (Dollars in thousands) 2006 ---------------------------------------------------- Fourth Third Second First Year To Quarter Quarter Quarter Quarter Date -------- -------- -------- -------- -------- Allowance for Loan and Lease Losses Balance at beginning of period $159,063 $157,580 $156,482 $153,983 $153,983 Net (charge-offs)/ recoveries: Commercial (2,665) 1,912 1,122 1,792 2,161 Commercial real estate mortgages 356 - 11 844 1,211 Residential mortgages - -- - -- - Real estate construction (666) 18 17 16 (615) Equity lines of credit - (11) - -- (11) Installment 26 10 11 4 51 -------- -------- -------- -------- -------- Total net (charge-offs)/ recoveries (2,949) 1,929 1,161 2,656 2,797 Provision for credit losses/ transfers (772) (446) (63) (157) (1,438) -------- -------- -------- -------- -------- Balance at end of period $155,342 $159,063 $157,580 $156,482 $155,342 ======== ======== ======== ======== ======== Net (Charge-Offs)/ Recoveries to Average Total Loans: (annualized) Commercial (0.27)% 0.20% 0.11% 0.19% 0.06% Commercial real estate mortgages 0.07% 0.00% 0.00% 0.18% 0.06% Residential mortgage 0.00% 0.00% 0.00% 0.00% 0.00% Real estate construction (0.35)% 0.01% 0.01% 0.01% (0.08)% Equity lines of credit 0.00% (0.01)% 0.00% 0.00% (0.00)% Installment 0.05% 0.02% 0.02% 0.01% 0.03% Total loans (0.11)% 0.08% 0.05% 0.11% 0.03% Reserve for Off- Balance Sheet Credit Commitments Balance at beginning of period $ 15,652 $ 15,206 $ 15,753 $ 15,596 $ 15,596 Provision for credit losses/ transfers 772 446 (547) 157 828 -------- -------- -------- -------- -------- Balance at end of period $ 16,424 $ 15,652 $ 15,206 $ 15,753 $ 16,424 ======== ======== ======== ======== ======== 2005 --------------------------------------------------- Fourth Third Second First Full Quarter Quarter Quarter Quarter Year -------- ------- ------- ------- ------- Allowance for Loan and Lease Losses Balance at beginning of period $152,920 $147,930 $147,607 $148,568 $148,568 Net (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 9,260 Provision for credit losses/ transfers (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 0.24% 0.50% 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 Commitments Balance at beginning of period $ 14,563 $ 13,811 $ 12,944 $ 11,751 $ 11,751 Provision for credit losses/ transfers 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 CORPORATION NONPERFORMING ASSETS (unaudited) (Dollars in thousands) 2006 ------------------------------------------ Fourth Third Second First Quarter Quarter Quarter Quarter ------- ------- -------- -------- Nonaccrual Loans Commercial $ 2,977 $10,416 $ 6,691 $ 5,642 Commercial real estate mortgages 4,849 8,094 3,644 923 Residential mortgages - -- - -- Real estate construction 12,678 - 4,617 7,492 Equity lines of credit - -- - -- Installment 379 269 49 498 ------- ------- -------- -------- Total nonaccrual loans 20,883 18,779 15,001 14,555 Other Nonperforming Assets - -- - -- ------- ------- -------- -------- Total nonperforming assets $20,883 $18,779 $ 15,001 $ 14,555 ======= ======= ======== ======== Loans 90 Days or More Past Due on Accrual Status $ 337 $ 27 $ 18 $ - Allowance for loan and lease losses as a percentage of: Nonaccrual loans 743.88% 847.03% 1,050.47% 1,075.11% Total nonperforming assets 743.88% 847.03% 1,050.47% 1,075.11% Total loans 1.50% 1.59% 1.60% 1.64% Nonaccrual loans as a percentage of total loans 0.20% 0.19% 0.15% 0.15% Nonperforming assets as a percentage of: Total loans and other nonperforming assets 0.20% 0.19% 0.15% 0.15% Total assets 0.14% 0.13% 0.10% 0.10% 2005 ------------------------------------------ Fourth Third Second First Quarter Quarter Quarter Quarter ------- ------- -------- -------- Nonaccrual Loans Commercial $ 5,141 $14,917 $ 17,982 $ 25,117 Commercial real estate mortgages 923 955 1,543 1,945 Residential mortgages 294 2,259 1,990 1,990 Real estate construction 7,650 - -- - Equity lines of credit 21 22 22 212 Installment 371 401 624 654 ------- ------- -------- -------- Total nonaccrual loans 14,400 18,554 22,161 29,918 Other Nonperforming Assets - -- - -- ------- ------- -------- -------- Total nonperforming assets $14,400 $18,554 $ 22,161 $ 29,918 ======= ======= ======== ======== Loans 90 Days or More Past Due on Accrual Status $ - $ - $ 103 $ 807 Allowance for loan and lease losses as a percentage of: Nonaccrual loans 1,069.33% 824.19% 667.52% 493.37% Total nonperforming assets 1,069.33% 824.19% 667.52% 493.37% Total loans 1.66% 1.70% 1.67% 1.72% Nonaccrual loans as a percentage of total loans 0.16% 0.21% 0.25% 0.35% Nonperforming assets as a percentage of: Total loans and other non- performing assets 0.16% 0.21% 0.25% 0.35% Total assets 0.10% 0.13% 0.15% 0.21% CITY NATIONAL CORPORATION AVERAGE BALANCES AND RATES (unaudited) (Dollars in millions) 2006 --------------------------------------------- Fourth Quarter Third Quarter Second Quarter ------------- ------------- -------------- Average Average Average Balance Rate Balance Rate Balance Rate ------- ---- ------- ---- ------- ----- Assets Interest-earning assets Loans Commercial $ 3,955 7.12% $ 3,827 7.05% $ 3,933 6.85% Commercial real estate mortgages 2,083 7.60 2,055 7.48 1,943 7.58 Residential mortgages 2,852 5.40 2,801 5.38 2,737 5.31 Real estate con- struction 763 9.24 761 9.37 743 9.14 Equity lines of credit 397 7.86 375 7.91 352 7.63 Installment 195 7.56 194 7.58 195 7.72 ------- ------- ------- Total loans 10,245 6.92 10,013 6.88 9,903 6.79 Due from banks - interest-bearing 68 2.70 61 2.55 46 2.31 Federal funds sold and securities purchased under resale agreements 54 5.28 3 7.13 51 4.77 Securities available- for-sale 3,122 4.64 3,191 4.63 3,529 4.55 Trading account securities 49 5.32 54 5.22 52 6.61 ------- ------- ------- Total interest- earning assets 13,538 6.35 13,322 6.30 13,581 6.19 Allowance for loan and lease losses (159) (158) (157) Cash and due from banks 407 428 443 Other assets 926 953 915 ------- ------- ------- Total assets $14,712 $14,545 $14,782 ======= ======= ======= Liabilities and Shareholders' Equity Interest-bearing deposits Interest checking accounts $ 762 0.43% $ 706 0.36% $ 757 0.27% Money market accounts 3,252 2.75 3,224 2.57 3,352 2.13 Savings deposits 160 0.48 163 0.41 174 0.37 Time deposits - under $100,000 197 4.11 184 3.87 176 3.00 Time deposits - $100,000 and over 1,969 4.65 1,999 4.55 1,652 4.07 ------- ------- ------- Total interest- bearing deposits 6,340 3.04 6,276 2.93 6,111 2.40 Federal funds purchased and securities sold under repurchase agreements 416 5.24 401 5.26 546 4.93 Other borrowings 554 6.19 558 5.63 652 5.51 ------- ------- ------- Total interest- bearing liabilities 7,310 3.41 7,235 3.27 7,309 2.86 Noninterest-bearing deposits 5,711 5,629 5,820 Other liabilities 218 245 199 Shareholders' equity 1,473 1,436 1,454 ------- ------- ------- Total liabilities and shareholders' equity $14,712 $14,545 $14,782 ======= ======= ======= Net interest spread 2.94% 3.03% 3.33% ==== ==== ===== Net interest margin 4.51% 4.53% 4.65% ==== ==== ===== Average prime rate 8.25% 8.25% 7.90% ==== ==== ===== First Quarter Year to Date -------------- -------------- Average Average Balance Rate Balance Rate -------- ---- ------- ---- Assets Interest-earning assets Loans Commercial $ 3,813 6.62% $ 3,882 6.91% Commercial real estate mortgages 1,872 7.35 1,989 7.51 Residential mortgages 2,666 5.27 2,764 5.34 Real estate construction 743 8.58 753 9.09 Equity lines of credit 334 7.17 365 7.66 Installment 197 7.41 195 7.57 ------- ------- Total loans 9,625 6.59 9,948 6.80 Due from banks - interest- bearing 44 1.98 55 2.43 Federal funds sold and securities purchased under resale agreements 13 4.32 31 5.01 Securities available-for-sale 3,926 4.47 3,439 4.57 Trading account securities 44 5.26 50 5.61 ------- ------- Total interest-earning assets 13,652 5.98 13,523 6.21 Allowance for loan and lease losses (155) (157) Cash and due from banks 439 429 Other assets 891 921 ------- ------- Total assets $14,827 $14,716 ======= ======= Liabilities and Shareholders' Equity Interest-bearing deposits Interest checking accounts $ 808 0.23% 758 0.32% Money market accounts 3,388 1.81 3,304 2.31 Savings deposits 179 0.37 169 0.41 Time deposits - under $100,000 180 2.59 184 3.42 Time deposits - $100,000 and over 1,254 3.42 1,721 4.26 ------- ------- Total interest-bearing deposits 5,809 1.92 6,136 2.59 Federal funds purchased and securities sold under repurchase agreements 809 4.48 542 4.89 Other borrowings 749 5.09 627 5.57 ------- ------- Total interest-bearing liabilities 7,367 2.52 7,305 3.02 Noninterest-bearing deposits 5,779 5,734 Other liabilities 200 216 Shareholders' equity 1,481 1,461 ------- ------- Total liabilities and shareholders' equity $14,827 $14,716 ======= ======= Net interest spread 3.46% 3.19% ==== ==== Net interest margin 4.62% 4.58% ==== ==== Average prime rate 7.43% 7.96% ==== ==== CITY NATIONAL CORPORATION AVERAGE BALANCES AND RATES (unaudited) (Dollars in millions) 2005 --------------------------------------------- Fourth Quarter Third Quarter Second Quarter ------------- ------------- -------------- Average Average Average Balance Rate Balance Rate Balance Rate ------- ---- ------- ---- ------- ----- Assets Interest-earning assets Loans Commercial $ 3,517 6.48% $ 3,376 6.21% $ 3,215 6.01% Commercial real estate mortgages 1,849 7.28 1,829 7.47 1,856 7.01 Residential mortgages 2,603 5.23 2,519 5.25 2,444 5.19 Real estate con- struction 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 3,965 4.36 3,983 4.25 3,988 4.24 Trading account securities 39 5.13 37 3.95 37 3.25 ------- ------- ------- Total interest- earning assets 13,281 5.80 13,089 5.67 12,890 5.50 Allowance for loan and lease losses (153) (151) (148) Cash and due from banks 451 441 443 Other assets 889 877 856 ------- ------- ------- 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 2.62 183 2.03 181 0.98 Time deposits - $100,000 and over 1,136 2.78 1,074 2.87 897 2.84 ------- ------- ------- 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% 4.73% ==== ==== ==== Average prime rate 6.97% 6.42% 5.91% ==== ==== ==== --------------------------------------------- First Quarter Year to Date -------------- -------------- Average Average Balance Rate Balance Rate ------- ---- ------- ---- Assets Interest-earning assets Loans Commercial $ 3,112 5.75% $ 3,306 6.13% Commercial real estate mortgages 1,818 7.02 1,838 7.20 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 4,031 4.38 3,992 4.31 Trading account securities 38 2.40 38 3.71 ------- ------- Total interest-earning assets 12,739 5.43 13,002 5.61 Allowance for loan and lease losses (149) (150) Cash and due from banks 441 444 Other assets 842 865 ------- ------- 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 1.69 184 1.65 Time deposits - $100,000 and over 944 2.19 1,013 2.72 ------- ---------- 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% 4.00% ==== ====Net interest margin 4.75% 4.79% ==== ====Average prime rate 5.44% 6.19% ==== ==== CITY NATIONAL CORPORATION CAPITAL AND CREDIT RATING DATA (unaudited) 2006 ----------------------------------------------- Fourth Third Second First Year To Quarter Quarter Quarter Quarter Date ------- ------- ------- ------- ------- Per Common Share: ----------------- Shares Outstanding (in thousands): Average - Basic 47,573 47,919 48,957 49,484 48,477 Average - Diluted 49,012 49,318 50,654 51,309 50,063 Period-End 47,492 47,639 48,115 49,535 Book Value $ 31.18 $ 30.61 $ 29.26 $ 29.87 Price: High $ 71.29 $ 68.41 $ 78.25 $ 78.25 $ 78.25 Low 65.34 63.69 60.02 71.95 60.02 Period-end 71.20 67.06 65.09 76.79 Capital Ratios (Dollars in millions): ----------------------- Risk-based capital Risk-adjusted assets $11,411 $10,999 $10,811 $10,473 Tier I capital $ 1,256 $ 1,229 $ 1,221 $ 1,295 Percentage of risk adjusted assets 11.01 11.18% 11.29% 12.36% Total capital $ 1,544 $ 1,563 $ 1,552 $ 1,624 Percentage of risk adjusted assets 13.53 14.21% 14.36% 15.51% Tier I leverage ratio 8.74% 8.66% 8.45% 8.92% Period-end shareholders' equity to total period-end assets 9.96 9.98% 9.73% 10.04% Period-end tangible shareholders' equity to total period-end tangible assets 8.18% 8.10% 7.83% 8.27% Average shareholders' equity to total average assets 10.01 9.87% 9.84% 9.99% 9.93% Average tangible shareholders' equity to total average tangible assets 8.15% 7.99% 8.04% 8.23% 8.10% 2005 ----------------------------------------------- Fourth Third Second First Full Quarter Quarter Quarter Quarter Year ------- ------- ------- ------- ------- Per Common Share: ----------------- Shares Outstanding (in thousands): Average - Basic 49,238 49,198 49,090 49,162 49,159 Average - Diluted 51,053 51,123 51,043 51,030 51,062 Period-End 49,347 49,117 49,145 48,958 Book Value $ 29.55 $ 28.85 $ 28.51 $ 26.97 Price: High $ 75.12 $ 76.10 $ 72.90 $ 71.35 $ 76.10 Low 66.39 68.42 66.84 67.49 66.39 Period-end 72.44 70.09 71.71 69.82 Capital Ratios (Dollars in millions): --------------------- Risk-based capital Risk-adjusted assets $10,148 $ 9,802 $ 9,663 $ 9,410 Tier I capital $ 1,251 $ 1,195 $ 1,151 $ 1,100 Percentage of risk adjusted assets 12.33% 12.19% 11.91% 11.69% Total capital $ 1,576 $ 1,539 $ 1,493 $ 1,437 Percentage of risk adjusted assets 15.53% 15.70% 15.45% 15.27% Tier I leverage ratio 8.82% 8.58% 8.39% 8.12% Period-end shareholders' equity to total period-end assets 10.00% 9.82% 9.68% 9.49% Period-end tangible shareholders' equity to total period-end tangible assets 8.21% 8.00% 7.83% 7.55% Average shareholders' equity to total average assets 9.88% 9.94% 9.68% 9.75% 9.81% Average tangible shareholders' equity to total average tangible assets 8.07% 8.08% 7.77% 7.80% 7.93% Senior Debt Credit Ratings -------------------------- For The Period Ended Standard & December 31, 2006 Moody's Fitch Poor's DBRS ------- ------ ---------- ------- City National Bank A2 A- A A (high) City National Corporation A3 A- A- A

CONTACT: City National Corporation
Investors
Christopher J. Carey
310.888.6777
Chris.Carey@cnb.com
Media
Cary Walker
213.673.7615
Cary.Walker@cnb.com


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