LOS ANGELES--(BUSINESS WIRE)--July 19, 2006--City NationalCorporation (NYSE: CYN), the parent company of wholly owned CityNational Bank, today reported second-quarter 2006 net income of $58.7million, or $1.16 per share, up from $57.7 million, or $1.13 pershare, for the second quarter of 2005.

Year to date, City National has earned $116 million, or $2.28 pershare, on revenue of $419.9 million. In the first half of 2005, thecompany earned net income of $113.2 million, or $2.22 per share, onrevenue of $397.8 million.

SECOND-QUARTER HIGHLIGHTS

  • Second-quarter revenue totaled $212.6 million, a 6 percent increase from the same period last year.
  • Average loans grew to $9.9 billion, up 13 percent from the second quarter of 2005. This growth was led by increases in commercial loans and residential mortgages.
  • Loan recoveries exceeded charge-offs, and nonaccrual loans amounted to $15 million, down $7.2 million, or 32 percent, from the second quarter of 2005 but up $0.4 million from the first quarter of this year.
  • Average deposits of $11.9 billion were 2 percent higher than the second quarter of 2005 and 3 percent higher than the first quarter of this year.
  • Noninterest income grew to $58.6 million, 14 percent higher than the second quarter of 2005 and 7 percent higher than the first quarter of this year, due primarily to the continuing growth of City National's wealth management and international services fee revenue.

"City National made good progress in the second quarter,continuing to add clients, invest for the future and build shareholdervalue," said President and Chief Executive Officer Russell Goldsmith."We're pleased that both average loans and fee income grew atdouble-digit rates and that credit quality was excellent.

"In the second quarter we completed the acquisition ofIndependence Investments, which brings client investment assets heldby City National and its affiliates to more than $47 billion. We alsoformed a strategic alliance with the Bank of East Asia, the largestindependent bank in Hong Kong, to provide clients of both companieswith greater financial capabilities and expertise on the ground in ourrespective countries. City National again demonstrated its commitmentto growing shareholder value and its willingness to deploy capitalproductively by repurchasing 1.5 million shares and obtaining theauthorization to buy back an additional 1.5 million shares."

 For the three months For the ended threeDollars in millions, June 30, monthsexcept per share --------------------- % ended % Change March 31, Change 2006 2005 2006----------------------- ---------- ---------- ------ --------- ------Earnings Per Share $1.16 $1.13 3 $1.12 4Net Income 58.7 57.7 2 57.2 3Average Assets 14,782.5 14,040.6 5 14,826.5 (0)Return on Average Assets 1.59 % 1.65 % (4) 1.57 % 2Return on Average Equity 16.20 17.03 (5) 15.68 3

ASSETS

Total assets at June 30, 2006 were $14.5 billion, up slightly fromone year ago but down 2 percent from March 31 of this year. Thedecrease from the first quarter reflects a 15 percent reduction in thecompany's investment securities portfolio.

REVENUE

Strong loan growth and solid growth in fees drove revenue higher.Second-quarter revenue (net interest income plus noninterest income)totaled $212.6 million, up 6 percent from the second quarter of 2005and 3 percent from the first quarter of this year.

NET INTEREST INCOME

Fully taxable-equivalent net interest income reached $157.5million in the second quarter of 2006, up 3 percent from $152.7million for the same period last year. Fully taxable-equivalent netinterest income in the first quarter of 2006 was $155.5 million.

Lending activity continued to grow in the second quarter. Averageloan balances reached $9.9 billion, up 13 percent from one year agoand 3 percent from the first quarter of 2006. Commercial loansincreased 23 percent from the second quarter of 2005 and 4 percentfrom the first quarter of this year. Residential mortgage lending rose12 percent from one year ago and 3 percent from the first quarter.Commercial real estate lending was up 3 percent from the secondquarter of 2005 and 2 percent from the first quarter. Real estateconstruction loans increased 2 percent from one year ago, but wereunchanged from the first quarter of this year.

City National's yield on earning assets reached 6.19 percent, upfrom 5.50 percent in the second quarter of 2005. At June 30, 2006, thebank's prime rate was 8.25 percent, 200 basis points higher than itwas at the same time last year.

Average deposits totaled $11.9 billion, an increase of 2 percentfrom the second quarter of 2005 and 3 percent from the first quarterof this year.

Average noninterest-bearing deposits fell 3 percent from thesecond quarter of 2005 but increased 1 percent from the first quarterof this year. Second-quarter title and escrow balances averaged $1.30billion, up from $1.25 billion in the first quarter of 2006.Interest-bearing savings and checking account balances were down fromboth the second quarter of last year and the first quarter of thisyear. Time deposits, including certificates of deposit, weresignificantly higher. Total interest expense grew 112 percent from thesecond quarter of 2005 and 14 percent from the first quarter of thisyear.

Responding to the steady rise in short-term interest rates overthe last two years, some of the company's business clients haveshifted funds from core deposit accounts into higher-yielding depositand investment accounts. In the first half of 2006, the increase inCity National's wealth management money market and brokerage accountbalances substantially exceeded the decline of low-cost deposits.

The company's second-quarter net interest margin was 4.65 percent,compared with 4.73 percent during the same period last year and 4.62percent in the first quarter of 2006.

Average securities totaled $3.6 billion in the second quarter of2006, down $490 million from one year ago and $390 million from thefirst quarter of 2006. The average duration of totalavailable-for-sale securities at June 30, 2006 was 3.5 years, comparedwith 3.2 years at March 31, 2006.

 For the three For the three months months ended % ended %Dollars in millions June 30, Change March 31, Change 2006 2005 2006----------------------- ---------- ---------- ------ --------- ------Average Loans $9,902.9 $8,747.7 13 $9,625.0 3Average Securities 3,581.2 4,071.5 (12) 3,970.4 (10)Average Earning Assets 13,581.2 12,935.6 5 13,652.2 (1)Average Deposits 11,930.8 11,678.7 2 11,587.6 3Average Core Deposits 10,278.7 10,781.6 (5) 10,334.0 (1)Fully Taxable- Equivalent Net Interest Income 157.5 152.7 3 155.5 1Net Interest Margin 4.65 % 4.73 % (2) 4.62 % 1

NONINTEREST INCOME

Second-quarter 2006 noninterest income was $58.6 million, 14percent higher than the second quarter of 2005, due primarily to thecontinuing growth of City National's wealth management andinternational services fee revenue.

Wealth Management

City National's assets under management or administrationsurpassed $47 billion in the second quarter. As a result, trust andinvestment fees increased 24 percent over the same time last year.Second-quarter brokerage and mutual fund fees also grew 24 percentfrom the second quarter of 2005.

On May 31, 2006, City National completed its acquisition ofIndependence Investment LLC, a Boston-based firm that manages $8billion in assets for corporate, public and Taft-Hartley pensionplans, as well as foundations and endowments. This acquisition isexpected to become modestly accretive to earnings in the second halfof 2006.

Not including the acquisition of Independence, City National'strust and investment fee income in the second quarter of 2006 grew 13percent from the same period last year. Second-quarter noninterestincome grew 10 percent from last year, excluding the acquisition ofIndependence.

Other Noninterest Income

Second-quarter cash management and deposit transaction fee incomefell 13 percent from the same period last year and 5 percent from thefirst quarter of 2006, as many clients continued to pay for serviceswith compensating deposit balances.

International services fee income grew 16 percent from the secondquarter of 2005 and 15 percent from the first quarter of this year,largely because of an increase in foreign exchange transactionrevenue.

Other noninterest income for the second quarter of 2006 amountedto $6.9 million, up $2 million from one year ago. The increase was duelargely to a $0.9 million gain on the exercise of warrants obtained asthe result of a credit restructuring agreement negotiated severalyears ago.

 At or for the At or for the three three months ended months June 30, ended ------------------- % March 31, %Dollars in millions 2006 2005 Change 2006 Change--------------------------- --------- --------- ------ ---------------Trust and Investment Fee Revenue $24.9 $20.1 24 $21.8 14Brokerage and Mutual Fund Fees 12.3 9.9 24 11.7 5Assets Under Management (1) 26,852.9 17,257.5 56 19,246.3 40Total Assets Under Managementor Administration (1) 47,199.0 36,972.9 28 40,435.6 17(1) Excludes $9.3 billion, $5.5 billion, and $9.4 billion of assets under management for the investment affiliates in which City National held minority ownership interests as of June 30, 2006, June 30, 2005, and March 31, 2006, respectively

NONINTEREST EXPENSE

Second-quarter 2006 noninterest expense amounted to $119.2million, up 9 percent from the second quarter of 2005 and 3 percentfrom the first quarter of this year. Excluding both the acquisition ofIndependence and the expensing of stock options, noninterest expensegrew 6 percent from the second quarter of last year.

City National's efficiency ratio for the second quarter of 2006was 55.20 percent, compared with 53.39 percent one year ago and 54.80percent for the first quarter of this year.

INCOME TAXES

The company's second-quarter 2006 effective tax rate was 37.5percent, compared with 37.3 percent in the second quarter of lastyear.

CREDIT QUALITY

Asset quality remains strong. At June 30, 2006, nonaccrual loanswere $15 million, compared with $22.2 million at the same time lastyear and $14.6 million in the first quarter of 2006. Recoveriesexceeded charge-offs for the sixth consecutive quarter, this time by$1.2 million. City National recorded $0.6 million in income throughits provision for credit losses, based on the bank's well-establishedloan-loss allowance methodology, which calculates the allowance bytaking into account several factors, including asset quality, creditrisk, loan growth and economic conditions.

At June 30, 2006, the allowance for loan losses was $157.6million, or 1.60 percent of outstanding loans. The reserve forunfunded credit commitments was an additional $15.2 million.

OUTLOOK

As previously disclosed, City National's management expectsearnings per share this year to grow at a rate of between 1 percentand 4 percent as compared with 2005.

CAPITAL RATIOS

Total risk-based capital and Tier 1 risk-based capital ratios atJune 30, 2006 were 14.36 percent and 11.29 percent, compared with theminimum "well-capitalized" capital ratios of 10 percent and 6 percent,respectively. The company's Tier 1 leverage ratio at June 30, 2006 was8.45 percent. Total risk-based capital, Tier 1 risk-based capital andthe Tier 1 leverage ratios at March 31, 2006 were 15.51 percent, 12.36percent and 8.92 percent, respectively.

The period-end ratio of shareholders' equity to total assets atJune 30, 2006 was 9.73 percent, compared to 9.68 percent at the sametime last year, and 10.04 percent at March 31, 2006.

STOCK REPURCHASE

During the second quarter of 2006, City National repurchased 1.5million of its outstanding shares at an average cost per share of$70.34. The company is currently authorized to repurchase as many as1.8 million shares, including 1.5 million that the board of directorsapproved on July 6 of this year. City National held 2.2 million sharesin treasury as of June 30, 2006.

CONFERENCE CALL

City National Corporation will host a conference call thisafternoon to discuss results for the second 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) 383-8009 and enter pass code 44034885. A listen-only livebroadcast of the call also will be available on the investor relationspage of the company's Website at cnb.com. There, it will be archivedand available for 12 months.

ABOUT CITY NATIONAL

City National Corporation's wholly owned subsidiary, City NationalBank, is California's Premier Private and Business Bank(R). Itprovides banking, investment and trust services through 55 offices,including 12 full-service regional centers, in Southern California,the San Francisco Bay Area and New York City. The corporation alsoholds majority ownership interests in 11 investment affiliates.

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 Six Months ------------------------ ---------------------------For The Period % %Ended June 30, 2006 2005 Change 2006 2005 Change----------------- ------------------------ ---------------------------Per Common Share Net Income Basic $1.20 $1.18 2 $2.36 $2.30 2 Diluted 1.16 1.13 3 2.28 2.22 2 Dividends 0.41 0.36 14 0.82 0.72 14 Book value 29.26 28.51 3Results of Operations: (In millions) Interest income $206 $174 18 $404 $342 18 Interest expense 52 24 112 98 46 114 ------- ------- --------- -------- Net interest income 154 150 3 306 296 3 Net interest income (Fully tax- equivalent) 157 153 3 313 303 3 Total revenue 213 201 6 420 398 6 Provision for credit losses (1) - NM (1) - NM Net income 59 58 2 116 113 2Financial Ratios: Performance Ratios: Return on average assets 1.59 % 1.65 % 1.58 % 1.64 % Return on average shareholders' equity 16.20 17.03 15.94 16.83 Period-end shareholders' equity to period-end assets 9.73 9.68 Net interest margin 4.65 4.73 4.63 4.74 Efficiency ratio 55.20 53.39 55.00 53.74 Capital Adequacy Ratios (Period end): Tier 1 leverage 8.45 8.39 Tier 1 risk-based capital 11.29 11.91 Total risk-based capital 14.36 15.45Asset Quality Ratios: Allowance for loan and lease losses to: Total loans 1.60 % 1.67 % Nonaccrual loans 1,050.47 667.52 Nonperforming assets to: Total loans and nonperforming assets 0.15 0.25 Total assets 0.10 0.15 Net (charge- offs)/ recoveries to Average total loans (annualized) 0.05 % 0.05 % 0.08 % 0.03 %Average Balances: (In millions) Loans $9,903 $8,748 13 $9,765 $8,660 13 Interest- earning assets 13,581 12,936 5 13,617 12,861 6 Assets 14,782 14,041 5 14,804 13,957 6 Core deposits 10,279 10,782 (5) 10,306 10,706 (4) Deposits 11,931 11,679 2 11,760 11,626 1 Interest- bearing liabilities 7,309 6,527 12 7,338 6,589 11 Shareholders' equity 1,454 1,359 7 1,467 1,356 8Period-End Balances: (In millions) Loans $9,822 $8,870 11 Assets 14,477 14,476 - Core deposits 10,152 11,141 (9) Deposits 11,979 12,152 (1) Shareholders' equity 1,408 1,401 1Wealth Management: (In millions) (1) Assets under management $26,853 $17,258 56 Assets under management or administration 47,199 36,973 28(1) Excludes 9,255 and $5,539 million of assets under managementfor the Convergent Capital Management asset managers in which CityNational holds minority ownership interests as of June 30, 2006 andJune 30, 2005, respectively.CITY NATIONAL CORPORATIONCONSOLIDATED STATEMENTS OF INCOME(unaudited) Three Months Ended Six Months Ended(Dollars in June 30, June 30, thousands except % % per share data) 2006 2005 Change 2006 2005 Change-------------- -------------------------------------------------------Interest income $206,204 $174,265 18 $404,396 $341,915 18Interest expense 52,206 24,619 112 97,992 45,843 114 --------- --------- --------- ---------Net Interest Income 153,998 149,646 3 306,404 296,072 3Provision for Credit Losses (610) - - (610) - -Noninterest Income Trust and investment fees 24,909 20,119 24 46,683 39,963 17 Brokerage and mutual fund fees 12,269 9,931 24 23,953 19,807 21 Cash management and deposit transaction fees 7,691 8,874 (13) 15,755 17,884 (12) International services 6,870 5,908 16 12,859 10,796 19 Bank-owned life insurance 677 652 4 1,611 1,516 6 Other service charges and fees 6,888 4,869 41 12,665 10,467 21 Gain (loss) on sale of assets - 162 (100) - 185 (100) Gain (loss) on sale of securities (716) 844 (185) (8) 1,099 (100) --------- --------- --------- --------- Total noninterest income 58,588 51,359 14 113,518 101,717 12Noninterest Expense Salaries and employee benefits 73,718 63,839 15 145,334 130,471 11 Net occupancy of premises 9,460 8,727 8 18,472 16,343 13 Legal and professional fees 9,169 10,791 (15) 18,586 19,505 (5) Information services 4,571 4,015 14 9,027 8,226 10 Depreciation 4,662 4,535 3 9,322 9,105 2 Amortization of intangibles 1,974 1,441 37 3,865 2,882 34 Marketing and advertising 4,990 3,943 27 9,006 7,517 20 Office services 2,549 2,688 (5) 5,240 5,177 1 Equipment 623 646 (3) 1,255 1,195 5 Minority interest expense 1,213 1,532 (21) 2,441 3,343 (27) Other 6,243 6,796 (8) 11,947 13,504 (12) --------- --------- --------- --------- Total noninterest expense 119,172 108,953 9 234,495 217,268 8 --------- --------- --------- ---------Income Before Taxes 94,024 92,052 2 186,037 180,521 3Applicable Income Taxes 35,283 34,345 3 70,063 67,353 4 --------- --------- --------- ---------Net Income $58,741 $57,707 2 $115,974 $113,168 2 ========= ========= ========= =========Other Data: Earnings per common share - basic $1.20 $1.18 2 $2.36 $2.30 2 Earnings per common share - diluted $1.16 $1.13 3 $2.28 $2.22 2 Dividends paid per common share $0.41 $0.36 14 $0.82 $0.72 14 Dividend payout ratio 34.43 % 30.86 % 12 35.03 % 31.43 % 11 Return on average assets 1.59 % 1.65 % (4) 1.58 % 1.64 % (3) Return on average share- holders' equity 16.20 % 17.03 % (5) 15.94 % 16.83 % (5) Net interest margin (Fully taxable- equivalent) 4.65 % 4.73 % (2) 4.63 % 4.74 % (2)CITY NATIONAL CORPORATIONCONSOLIDATED QUARTERLY STATEMENTS OF INCOME(unaudited) 2006 -----------------------------(Dollars in thousands Second First Year to except per share data) Quarter Quarter Date--------------------------------------- --------- --------- ---------Interest Income $206,204 $198,192 $404,396Interest Expense 52,206 45,786 97,992 --------- --------- --------- Net Interest Income 153,998 152,406 306,404Provision for Credit Losses (610) - (610)Noninterest Income Trust and investment fees 24,909 21,774 46,683 Brokerage and mutual fund fees 12,269 11,684 23,953 Cash management and deposit transaction fees 7,691 8,064 15,755 International services 6,870 5,989 12,859 Bank-owned life insurance 677 934 1,611 Other service charges and fees 6,888 5,777 12,665 Gain (loss) on sale of assets - - - Gain (loss) on sale of securities (716) 708 (8) --------- --------- --------- Total noninterest income 58,588 54,930 113,518Noninterest Expense Salaries and employee benefits 73,718 71,616 145,334 Net occupancy of premises 9,460 9,012 18,472 Legal and professional fees 9,169 9,417 18,586 Information services 4,571 4,456 9,027 Depreciation 4,662 4,660 9,322 Amortization of intangibles 1,974 1,891 3,865 Marketing and advertising 4,990 4,016 9,006 Office services 2,549 2,691 5,240 Equipment 623 632 1,255 Minority interest expense 1,213 1,228 2,441 Other 6,243 5,704 11,947 --------- --------- --------- Total noninterest expense 119,172 115,323 234,495 --------- --------- ---------Income Before Taxes 94,024 92,013 186,037Applicable Income Taxes 35,283 34,781 70,063 --------- --------- ---------Net Income $58,741 $57,232 $115,974 ========= ========= =========Other Data: Earnings per common share - basic $1.20 $1.16 $2.36 Earnings per common share - diluted $1.16 $1.12 $2.28 Dividends paid per common share $0.41 $0.41 $0.82 Dividend payout ratio 34.43 % 35.65 % 35.03 % Return on average assets 1.59 % 1.57 % 1.58 % Return on average shareholders' equity 16.20 % 15.68 % 15.94 % Net interest margin (Fully taxable- equivalent) 4.65 % 4.62 % 4.63 % Full-time equivalent employees 2,648 2,570CITY NATIONAL CORPORATIONCONSOLIDATED QUARTERLY STATEMENTS OF INCOME(unaudited) 2005 -------------------------------------------------(Dollars in Fourth Third Second First Full thousands except Quarter Quarter Quarter Quarter Year per share data)------------------- --------- --------- --------- --------- ---------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 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 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 % 4.72 % 4.75 % 4.79 % Full-time equivalent employees 2,539 2,516 2,477 2,445CITY NATIONAL CORPORATIONCONSOLIDATED PERIOD END BALANCE SHEET(unaudited) 2006 ------------------------- Second First(In thousands) Quarter Quarter-------------------------------------------- ------------ ------------Assets Cash and due from banks $467,076 $457,156 Federal funds sold 1,900 - Due from banks - interest-bearing 50,416 48,890 Securities-available-for-sale 3,211,590 3,850,173 Trading account securities 123,418 57,353 Loans: Commercial 3,738,361 3,698,614 Commercial real estate mortgages 2,032,698 1,891,517 Residential mortgages 2,769,340 2,700,966 Real estate construction 723,570 748,696 Equity lines of credit 364,312 339,348 Installment 193,474 188,262 ------------ ------------ Total loans 9,821,755 9,567,403 Allowance for loan and lease losses (157,580) (156,482) ------------ ------------ Net loans 9,664,175 9,410,921 Premises and equipment, net 84,802 84,884 Goodwill and other intangibles 298,004 283,642 Other assets 575,686 546,365 ------------ ------------ Total assets $14,477,067 $14,739,384 ============ ============Liabilities: Deposits: Noninterest-bearing $5,880,630 $5,945,485 Interest-bearing 6,098,200 5,963,044 ------------ ------------ Total deposits 11,978,830 11,908,529 Federal funds purchased and securities sold under repurchase agreements 234,995 526,920 Other short-term borrowed funds 143,724 151,522 Subordinated debt 266,675 269,785 Other long-term debt 209,864 213,819 Minority interest 27,985 25,225 Other liabilities 206,929 164,020 ------------ ------------ Total liabilities 13,069,002 13,259,820Shareholders' Equity Common stock 50,735 50,693 Additional paid-in capital 402,476 399,976 Retained earnings 1,196,812 1,158,290 Accumulated other comprehensive loss (86,931) (73,250) Treasury shares (155,027) (56,145) ------------------------- Total shareholders' equity 1,408,065 1,479,564 ------------------------- Total liabilities and shareholders' equity $14,477,067 $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 3,505,576 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 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 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 12,597,855Shareholders' 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 CORPORATIONCREDIT LOSS EXPERIENCE(unaudited) 2006 ----------------------------- Second First Year To(Dollars in Quarter Quarter Date thousands)------------------ --------- --------- ---------Allowance for Loan and Lease LossesBalance at beginning of period $156,482 $153,983 $153,983Net (charge- offs)/recoveries: Commercial 1,122 1,792 2,914 Commercial real estate mortgages 11 844 855 Residential mortgages - - - Real estate construction 17 16 33 Equity lines of credit - - - Installment 11 4 15 --------- --------- --------- Total net (charge-offs)/recoveries 1,161 2,656 3,817Provision for credit losses (63) (157) (220) --------- --------- ---------Balance at end of period $157,580 $156,482 $157,580 ========= ========= =========Net (Charge-Offs)/Recoveries to Average Total Loans: (annualized) Commercial 0.11 % 0.19 % 0.15 % Commercial real estate mortgages 0.00 % 0.18 % 0.09 % Residential mortgage 0.00 % 0.00 % 0.00 % Real estate construction 0.01 % 0.01 % 0.01 % Equity lines of credit 0.00 % 0.00 % 0.00 % Installment 0.02 % 0.01 % 0.02 % Total loans 0.05 % 0.11 % 0.08 %Reserve for Off-Balance Sheet Credit CommitmentsBalance at beginning of period $15,753 $15,596 $15,596 Provision for credit losses (547) 157 (390) --------- --------- ---------Balance at end of period $15,206 $15,753 $15,206 ========= ========= ========= 2005 ------------------------------------------------- Fourth Third Second First Full(Dollars in Quarter Quarter Quarter Quarter Year thousands)------------------ --------- --------- --------- --------- ---------Allowance for Loan and Lease 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 for credit losses (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 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 ------------------- ---------------------------------- Second First Fourth Third Second First(Dollars in Quarter Quarter Quarter Quarter Quarter Quarter thousands)--------------- --------- --------- --------- -------- -------- ------Nonaccrual Loans Commercial $6,691 $5,642 $5,141 $14,917 $17,982 $25,117 Commercial real estate mortgages 3,644 923 923 955 1,543 1,945 Residential mortgages - - 294 2,259 1,990 1,990 Real estate construction 4,617 7,492 7,650 - - - Equity lines of credit - - 21 22 22 212 Installment 49 498 371 401 624 654 --------- --------- --------- -------- -------- ------ Total nonaccrual loans 15,001 14,555 14,400 18,554 22,161 29,918Other Nonperforming Assets - - - - - - --------- --------- --------- -------- -------- ------ Total nonperforming assets $15,001 $14,555 $14,400 $18,554 $22,161 $29,918 ========= ========= ========= ======== ======== ======Loans 90 Days or More Past Due on Accrual Status $18 $- $- $- $103 $807Allowance for loan and lease losses as a percentage of: Nonaccrual loans 1,050.47 %1,075.11 %1,069.33 % 824.19 % 667.52 % 493.37 % Total nonperforming assets 1,050.47 %1,075.11 %1,069.33 % 824.19 % 667.52 % 493.37 % Total loans 1.60 % 1.64 % 1.66 % 1.70 % 1.67 % 1.72 %Nonaccrual loans as a percentage of total loans 0.15 % 0.15 % 0.16 % 0.21 % 0.25 % 0.35 %Nonperforming assets as a percentage of: Total loans and other nonperforming assets 0.15 % 0.15 % 0.16 % 0.21 % 0.25 % 0.35 % Total assets 0.10 % 0.10 % 0.10 % 0.13 % 0.15 % 0.21 %CITY NATIONAL CORPORATIONAVERAGE BALANCES AND RATES(unaudited) 2006 ------------------------------------------------ Second Quarter First Quarter Year to Date --------------- --------------- ---------------- Average Average Average Average Average Average(Dollars in millions) Balance Rate Balance Rate Balance Rate--------------------- -------- ------ -------- ------ -------- -------Assets Interest-earning assets Loans Commercial $3,968 6.84 % $3,813 6.62 % $3,890 6.74 % Commercial real estate mortgages 1,909 7.60 1,875 7.35 1,892 7.47 Residential mortgages 2,737 5.31 2,663 5.27 2,701 5.29 Real estate construction 743 9.14 743 8.58 743 8.86 Equity lines of credit 352 7.63 334 7.17 343 7.41 Installment 195 7.72 197 7.41 196 7.57 -------- -------- -------- Total loans 9,903 6.79 9,625 6.59 9,765 6.69 Due from banks - interest- bearing 46 2.31 44 1.98 45 2.15 Federal funds sold and securities purchased under resale agreements 51 4.77 13 4.32 32 4.68 Securities available-for- sale 3,529 4.55 3,926 4.47 3,727 4.51 Trading account securities 52 6.61 44 5.26 48 5.97 -------- -------- -------- Total interest- earning assets 13,581 6.19 13,652 5.98 13,617 6.08 Allowance for loan and lease losses (157) (155) (156) Cash and due from banks 443 439 441 Other assets 915 891 902 -------- -------- -------- Total assets $14,782 $14,827 $14,804 ======== ======== ========Liabilities and Shareholders' Equity Interest-bearing deposits Interest checking accounts $757 0.27 % $808 0.23 % $783 0.25 % Money market accounts 3,352 2.13 3,388 1.81 3,370 1.97 Savings deposits 174 0.37 179 0.37 176 0.37 Time deposits - under $100,000 176 3.00 180 2.59 178 2.79 Time deposits - $100,000 and over 1,652 4.07 1,254 3.42 1,454 3.79 -------- -------- -------- Total interest- bearing deposits 6,111 2.40 5,809 1.92 5,961 2.16 Federal funds purchased and securities sold under repurchase agreements 546 4.93 809 4.48 677 4.66 Other borrowings 652 5.51 749 5.09 700 5.29 -------- -------- -------- Total interest- bearing liabilities 7,309 2.86 7,367 2.52 7,338 2.69 Noninterest- bearing deposits 5,820 5,779 5,800 Other liabilities 199 200 199 Shareholders' equity 1,454 1,481 1,467 -------- -------- -------- Total liabilities and shareholders' equity $14,782 $14,827 $14,804 ======== ======== ========Net interest spread 3.33 % 3.46 % 3.39 % ===== ===== ======Net interest margin 4.65 % 4.62 % 4.63 % ===== ===== ======Average prime rate 7.90 % 7.43 % 7.66 % ===== ===== ======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 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 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 and lease 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 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 6,205 6,104 5,985 198 178 170 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 % ===== ===== ===== 2005 -------------------------------- First Quarter Full Year --------------- ---------------- Average Average Average Average(Dollars in millions) Balance Rate Balance Rate---------------------------------------------- ------ -------- -------Assets Loans Commercial $3,112 5.75 % $3,305 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 4,078 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 and lease 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 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 5,694 5,999 175 180 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 % ===== ======Average prime rate 5.44 % 5.68 % ===== ======CITY NATIONAL CORPORATIONCAPITAL AND CREDIT RATING DATA(unaudited) 2006 ------------------------- Second First Year To Quarter Quarter Date -------- -------- -------Per Common Share:------------------------------------------- Shares Outstanding (in thousands): Average - Basic 48,957 49,484 49,220 Average - Diluted 50,654 51,309 50,977 Period-End 48,115 49,535Book Value $29.26 $29.87Price: High $78.25 $78.25 $78.25 Low 60.02 71.95 60.02 Period-end 65.09 76.79Capital Ratios (Dollars in millions):---------------------------------------------------------------------Risk-based capital Risk-adjusted assets $10,811 $10,473 Tier I capital $1,221 $1,295 Percentage of risk adjusted assets 11.29 % 12.36 % Total capital $1,552 $1,624 Percentage of risk adjusted assets 14.36 % 15.51 % Tier I leverage ratio 8.45 % 8.92 % Period-end shareholders' equity to total period-end assets 9.73 % 10.04 % Period-end tangible shareholders' equity to total period-end tangible assets 7.83 % 8.27 % Average shareholders' equity to total average assets 9.84 % 9.99 % 9.91 % Average tangible shareholders' equity to total average tangible assets 8.04 % 8.23 % 8.13 % 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 48,958Book Value $29.55 $28.85 $28.51 $26.97Price: 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 69.82Capital 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 June 30, 2006 Standard & Fitch Poor's DBRS --------- -------- ---------- City National Bank A- A A City National A- A- A(low) Corporation

CONTACT: City National
Financial/Investors:
Christopher J. Carey, 310-888-6777
Chris.Carey@cnb.com
or
Media:
Cary Walker, 213-673-7615
Cary.Walker@cnb.com
or
Conference Call:
Today 2:00 p.m. PDT
866-383-8009
Pass Code: 44034885

SOURCE: City National Corporation