LOS ANGELES--(BUSINESS WIRE)--July 17, 2001--

First Half Net Income Up 9 Percent to a Record $69.9 Million

City National Corporation (NYSE:CYN), parent corporation of whollyowned City National Bank, today reported record net income of $36.3million for the second quarter of 2001, up 9 percent from $33.4million for the second quarter of 2000 and 8 percent from the firstquarter of 2001.

Net income per diluted common share of $0.74 increased 9 percentfrom $0.68 per share in the second quarter of 2000 and 7 percent from$0.69 per share in the first quarter of 2001, and includesapproximately $0.025 related to the reduction in the expected fullyear effective income tax rate attributable to first quarter 2001pre-tax income.

For the first half of 2001, City National Corporation alsoachieved record net income of $69.9 million, an increase of 9 percentover net income of $64.5 million for the first half of 2000. Netincome per diluted common share was $1.43 per share, an increase of 7percent compared with $1.34 per share in the first half of 2000.

Cash net income per diluted common share, which excludes theamortization of core deposit intangibles and goodwill fromacquisitions, rose 8 percent to $0.82, compared with $0.76 per sharein the second quarter of 2000 and was up 6 percent compared with $0.77per share in the first quarter of 2001. For the first half of 2001,cash net income per diluted common share was $1.59 per share, anincrease of 7 percent from $1.48 per share for the first half of 2000.

"City National continued to grow its revenue, income, loans anddeposits," said Russell Goldsmith, CEO of City National Corporation."It is particularly noteworthy that in the first half of this year weincreased noninterest income 26 percent versus one year ago and havegrown average deposits 15 percent. We achieved this even while wereduced both nonperforming assets and syndicated non-relationshiploans.

"Going forward, we remain very focused on striking the rightbalance among delivering performance growth while investing in ourbusinesses and our people, controlling expenses, achievingproductivity gains, serving our clients well, and sustaining goodcredit quality. The first half of the year has been highlighted by ourhighly successful introduction of a number of new products, such asOnline Cash Management, as well as the recent deployment of a provenbanking team to open our new East Bay commercial banking center,expanding our reach in the San Francisco Bay Area," Goldsmith added.

Return on Assets/Return on Equity

The corporation's return on average assets in the second quarterof 2001 was 1.60 percent, compared with 1.58 percent in the secondquarter of 2000 and 1.53 percent in the first quarter of 2001. Thereturn on average shareholders' equity was 18.28 percent for thesecond quarter of 2001, compared with 20.37 percent for the prior-yearsecond quarter and 17.81 percent for the first quarter of 2001. Forthe first half of 2001, the return on average assets was 1.56 percentand the return on average shareholders' equity was 18.05 percentcompared with a 1.60 percent return on average assets and a 20.60percent return on average shareholders' equity for the first half of2000. The lower return on average shareholders' equity in the currentperiod compared with a year ago is due primarily to a higher level ofshareholders' equity from increased unrealized securities gains andthe positive mark-to-market valuation of interest rate swaps treatedas cash flow hedges.

On a cash basis (which excludes goodwill and the after-tax impactof nonqualifying core deposit intangibles from average assets andaverage shareholders' equity), the return on average assets in thesecond quarter of 2001 was 1.81 percent, compared with 1.79 percent inthe second quarter of 2000, and 1.74 percent for the first quarter of2001. The return on average shareholders' equity on a cash basis was

  • 26.40 percent for the second quarter of 2001, compared with 31.28percent for the prior-year second quarter and 26.21 percent for thefirst quarter of 2001. On a cash basis, for the first half of 2001,the return on average assets was 1.78 percent and the return onaverage shareholders' equity was 26.19 percent, compared with a 1.80percent return on average assets and 29.00 percent return on averageshareholder's equity for the first half of 2000.

Assets

Total average assets reached $9.1 billion in the second quarter of2001, an increase of 7 percent over the $8.5 billion in average assetsfor the second quarter of 2000 and an increase of 2 percent over the$8.9 billion in average assets for the first quarter of 2001. Totalassets at June 30, 2001 were $9.1 billion, compared with $8.7 billionat June 30, 2000 and $8.9 billion at March 31, 2001. Securities and,to a lesser extent, loans accounted for the increase in assets fromlast year and the first quarter of 2001.

Loans

Average loans rose to $6.5 billion for the second quarter of 2001,an increase of 3 percent over the prior-year second quarter. Averagerelationship loans increased $560.3 million, or 10 percent, thisquarter over the year-ago quarter. Conversely, average syndicatednon-relationship loans fell to $133.8 million for the second quarterof 2001, down significantly from both the second quarter of 2000, aswell as the first quarter of 2001. For the first half of 2001, averagerelationship loans increased 16 percent to $6.4 billion from $5.5billion for the first half of 2000.

The growth in average relationship loans over the year-ago quarterwas driven primarily by increases in real estate mortgage, commercialand residential first mortgage loans. Compared with the prior-yearsecond quarter, real estate mortgage loan average balances rose 19percent to $1.6 billion from $1.3 billion, commercial loan averagesrose 5 percent to $2.9 billion from $2.8 billion and residential firstmortgage loans rose 9 percent to $1.3 billion, from $1.2 billion.Other relationship loan categories also contributed to loan growthover the prior-year second quarter.

Total loans at June 30, 2001 were $6.6 billion, compared with $6.3billion at June 30, 2000, and $6.5 billion at March 31, 2001. At June30, 2001, the commercial loan portfolio contained no directenergy-related borrowings, and technology-related borrowings accountedfor less than 1 percent of the commercial loan portfolio.

At June 30, 2001, syndicated non-relationship loans were $110.5million, or 1.7 percent of the loan portfolio, compared with $148.3million at March 31, 2001, $191.8 million at December 31, 2000, and$442.3 million at June 30, 2000. The average outstanding loan balancein the syndicated non-relationship portfolio at June 30, 2001 was $2.6million, which represents just under half the average commitmentamount.

Management anticipates average relationship loan growth in 2001will range from 9 percent to 13 percent, reflecting its expectationthat the California economy will continue to grow, but at a slowerpace than experienced in recent years.

Deposits

Average deposits during the second quarter of 2001 increased 11percent to $7.0 billion over the second quarter of 2000, and were$188.4 million higher than the first quarter of 2001. During the firsthalf of 2001, average deposits increased 15 percent to $6.9 billion,compared with $6.0 billion for the first half of 2000.

During the second quarter of 2001, average core deposits, whichprovide a stable source of low cost funding, were $5.5 billion, anincrease of 9 percent over the $5.1 billion in the second quarter of2000, and 7 percent higher than the $5.1 billion for the first quarterof 2001. Average core deposits represented 79 percent of the totalaverage deposit base for the quarter. For the first half of 2001,average core deposits were $5.3 billion compared with $4.8 billion forthe first half of 2000, an increase of 11 percent. Internal growth,increased sales of cash management products and a reduction in theearnings credit on analyzed deposit accounts resulting from lowerinterest rates, all contributed to the growth in deposits.

Deposits totaled $7.1 billion at June 30, 2001, compared with $6.4billion at June 30, 2000, and $6.9 billion at March 31, 2001.

Management expects average deposit growth in 2001, compared with2000, to be in the range of 8 percent to 12 percent.

Net Interest Income

Net interest income on a fully taxable-equivalent basis rose 1percent to $108.4 million in the second quarter of 2001, compared with$107.8 million for the second quarter of 2000. Second quarter 2001 netinterest income was slightly higher than the $108.1 million for thefirst quarter of 2001. Fully taxable-equivalent net interest incomefor the first half of 2001 was $216.5 million, an increase of 7percent over $203.1 million for the first half of 2000. Interestincome recovered on nonaccrual and charged-off loans included abovewas $0.6 million in the second quarter of 2001, compared with $1.3million for the second quarter a year ago and $1.6 million for thefirst quarter of 2001. Interest recovered in the first half of 2001was $2.2 million compared with $2.3 million for the first half of2000.

The fully taxable-equivalent net interest margin in the secondquarter of 2001 was 5.23 percent, compared with 5.58 percent for thesecond quarter of 2000 and 5.40 percent for the first quarter of 2001.The net interest margin for the first half of 2001 was 5.32 percentcompared with 5.53 percent for the first half of 2000. The decreasefrom prior periods was primarily due to a lower prime rate, and a lagin the re-pricing of time deposits and interest rate swaps. The Bank'sprime rate was 6.75 percent at June 30, 2001, compared with 9.50percent a year earlier, and 8.00 percent at March 31, 2001.

Management expects the net interest margin for all of 2001 will bemodestly lower than the 5.44 percent reported for 2000, but slightlyabove the current quarterly level of 5.23 percent, as time depositsand interest rate swaps re-price on a lagged basis. This expectationis contingent on rates remaining stable for the rest of the year;further modest reductions in rates would not be anticipated tomaterially alter that margin.

Noninterest Income

Reflecting the success of strategic initiatives to grow feeincome, noninterest income continued its strong, across-the-boardgrowth, increasing 23 percent to $32.9 million in the second quarterof 2001, from $26.8 million in the second quarter of 2000, and 5percent from the $31.3 million for the first quarter of 2001.Noninterest income of $64.2 million for the first half of 2001increased 26 percent over the $51.0 million for the first half of2000. Noninterest income for the second quarter and first half of 2001was 24 percent and 23 percent of total revenues, compared with 20percent and 21 percent, respectively, for the second quarter and firsthalf of 2000.

Trust and investment fee revenue was helped by the acquisition ofReed, Conner & Birdwell, which closed at year-end 2000, and anincrease in new business within City National Investments (CNI).Assets under administration totaled $18.5 billion at June 30, 2001,including $7.2 billion under management, compared with $15.5 billionand $5.4 billion, respectively, at June 30, 2000, and $17.9 billionand $6.6 billion, respectively, at March 31, 2001. Assets undermanagement at June 30, 2001 and March 31, 2001 included $1.2 billionand $1.1 billion, respectively, of assets managed by Reed, Conner &Birdwell. The remaining year-over-year increase in assets undermanagement is primarily attributable to increased participation in theCNI Charter Funds, City National's family of mutual funds.

The other key component in the growth of noninterest income iscash management and deposit transaction fees. These increased as theresult of strong internal growth in deposits, in many casesattributable to higher sales of new online cash management products.

International services income rose primarily as a result of anincrease in fee income associated with standby letters of credit andforeign exchange.

Gains on the sale of assets and the repurchase of debt and gains(losses) on the sale of securities amounted to $1.4 million for thesecond quarter of 2001, compared with no material gain or loss for thesame period a year earlier, and gains of $1.7 million for the firstquarter of 2001. The repurchase of $8.7 million of subordinated debtalong with the cancellation of the related interest rate swapsresulted in a $0.9 million gain in the second quarter of 2001. For thefirst half of 2001, $3.2 million in gains on the sale of assets andthe repurchase of debt and gains on the sale of securities wererealized, compared with $0.2 million for the first half of 2000.

Management expects growth in noninterest income to range from 15percent to 20 percent for 2001.

Noninterest Expense

Noninterest expense was $79.0 million in the second quarter of2001, up 4 percent from $76.1 million for the second quarter of 2000,and 3 percent from $76.6 million for the first quarter of 2001. Theincrease over the year-ago quarter was primarily the result of thecorporation's growth, including expenses related to Reed, Conner &Birdwell, new offices and additional colleagues. Noninterest expensefor the first half of 2001 was $155.6 million, an increase of 7percent compared with $145.2 million for the first half of 2000.Amortization of goodwill reduced net income by $3.2 million for thesecond quarter and $6.4 million for the first half of 2001.

The corporation's cash efficiency ratio for the second quarter of2001 improved to 52.60 percent, from 53.26 percent for the secondquarter of 2000. The 1 percent improvement is due to both increasedrevenues and the corporation's ongoing efforts to improve efficiencyand productivity. The cash efficiency ratio for the current quarterrose slightly from the 52.01 percent for the first quarter of 2001.For the first half of 2001, the cash efficiency ratio was 52.31percent compared with 54.03 percent for the first half of 2000.

Management currently anticipates that 2001 noninterest expensewill increase between 5 percent and 8 percent from 2000.

Income Taxes

The effective tax rate, including the impact of the reduction inthe expected full-year effective income tax rate attributable to firstquarter 2001 pre-tax income, was 30.7 percent for the second quarter,and 33.1 percent for the first half of 2001. This compares with 34.9percent for the second quarter and 34.7 percent for the first half of2000. The lower tax rates, compared with prior periods, are dueprimarily to the formation of a special purpose subsidiary forcapital-raising activities during the second quarter of 2001. Thecorporation continues to evaluate its long-term plan for itsregistered investment company subsidiary. Management currentlyanticipates its effective tax rate may approximate the 32.5 percent to

  • 33.5 percent range for 2001.

Credit Quality

Net loan charge-offs were $7.3 million and $4.0 million for thesecond quarters of 2001 and 2000, respectively. Net loan charge-offsfor the first quarter of 2001 were $8.2 million. For the first sixmonths of 2001 and 2000, net loan charge-offs were $15.6 million and$7.5 million, respectively.

Relationship loan net charge-offs were $4.3 million for the secondquarter of 2001, compared with $0.8 million for the second quarter of2000 and $6.3 million for the first quarter of 2001. Second quarter2001 syndicated non-relationship loan net charge-offs were $3.0million, compared with $3.2 million in the second quarter of 2000, and$1.9 million for the first quarter of 2001.

As a percentage of average loans, annualized net charge-offs were

  • 0.45 percent, 0.25 percent and 0.51 percent for the second quarters of2001 and 2000, and the first quarter of 2001, respectively.Relationship loan annualized net charge-offs were 0.27 percent ofaverage relationship loans outstanding for the second quarter of 2001,compared with 0.06 percent for the second quarter of 2000, and 0.40percent for the first quarter of 2001.

Total nonperforming assets (nonaccrual loans and ORE) were $38.3million, or 0.58 percent of total loans and ORE, at June 30, 2001,compared with $35.5 million, or 0.56 percent, at June 30, 2000, and$53.8 million, or 0.83 percent, at March 31, 2001. Nonperformingassets decreased 29 percent from the first quarter 2001, and 39percent from year-end 2000.

Total nonperforming relationship assets were $30.2 million, or

  • 0.47 percent of total relationship loans and ORE, at June 30, 2001,compared with $32.2 million, or 0.55 percent, at June 30, 2000, and$37.1 million, or 0.58 percent, at March 31, 2001, and do not containany concentration of credits within a specific industry sector. Totalsyndicated non-relationship loans on nonaccrual status totaled $8.1million at June 30, 2001 and consisted of two loans, compared withfour loans totaling $16.7 million that were outstanding at March 31,2001.

City National recorded a provision for credit losses of $6.5million and $14.0 million for the second quarter and first half of2001, respectively, compared with $4.0 million for both the secondquarter and first half of 2000. The provision for credit losses in thefirst quarter of 2001 was $7.5 million. The provision for creditlosses primarily reflects the levels of net loan charge-offs andnonaccrual loans, as well as management's ongoing assessment of thecredit quality of the portfolio and the year-over-year growth of theloan portfolio.

The allowance for credit losses at June 30, 2001 totaled $133.9million, or 2.04 percent of outstanding loans. This compares with anallowance of $140.5 million, or 2.21 percent of outstanding loans, atJune 30, 2000, and an allowance of $134.7 million, or 2.07 percent ofoutstanding loans at March 31, 2001. The allowance for credit lossesas a percentage of nonaccrual loans was 361 percent at June 30, 2001,compared with 401 percent at June 30, 2000, and 256 percent at March31, 2001. Management believes the allowance for credit losses isadequate to cover risks inherent in the portfolio at June 30, 2001.

The provision for credit losses to be taken in the balance of 2001will reflect management's assessment of the above factors, as well asthe economic environment at each reporting date. Based on its currentassessment of these factors, management anticipates that a provisionfor credit losses for all of 2001 could fall within the $28 million to$38 million range.

Outlook

Management currently expects that net income per diluted commonshare for 2001 will be approximately 8 percent to 11 percent higherthan 2000.

Capital Levels

Total risk-based capital and Tier 1 risk-based capital ratios atJune 30, 2001 were 11.64 percent and 8.76 percent, compared with theminimum "well-capitalized" capital ratios of 10 percent and 6 percent,respectively. The corporation's Tier 1 leverage ratio of 6.97 percentexceeded the regulatory minimum of 4 percent required for a"well-capitalized" institution. Total risk-based capital, Tier 1risk-based capital and the Tier 1 leverage ratios at March 31, 2001were 11.35 percent, 8.33 percent and 6.71 percent, respectively.

Stock Repurchase

Under the October 26, 2000 stock buyback program of one millionshares, 291,700 shares have been repurchased at an average price of$33.02 per share. No treasury shares were purchased in the secondquarter of 2001. The shares purchased under the buyback program havebeen reissued for acquisitions, upon the exercise of stock options,and for other general corporate purposes. There were no treasuryshares at June 30, 2001.

About City National

City National Corporation is a publicly owned corporation with$9.1 billion in total assets whose stock is traded on the New YorkStock Exchange under the symbol "CYN." The corporation's wholly ownedsubsidiary, City National Bank, is California's Premier Private andBusiness Bank(SM). City National Bank, which provides banking, trustand investment services, has 49 California offices located in ContraCosta, Los Angeles, Orange, Riverside, San Bernardino, San Diego, SanFrancisco, San Mateo, Santa Clara and Ventura counties.

This news release contains forward-looking statements about thecorporation for which the corporation claims the protection of thesafe harbor 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 thecorporation's possible or assumed future financial condition, and itsresults of operations and business. Forward-looking statements aresubject to risks and uncertainties. A number of factors, some of whichare beyond the corporation's ability to control or predict, couldcause future results to differ materially from those contemplated bysuch forward-looking statements. These factors include (1) a continuedeconomic slowdown in California attributable to energy supply issuesor any other unforeseen events, (2) changes in interest rates, (3)significant changes in banking laws or regulations, (4) increasedcompetition in the corporation's market, (5) higher-than-expectedcredit losses, and (6) possible changes in the plans for itsregistered investment company subsidiary.

For a more complete discussion of these risks and uncertainties,see the corporation's Quarterly Report on Form 10-Q for thequarter-ended March 31, 2001, and particularly the section ofManagement's Discussion and Analysis therein titled "CautionaryStatement for Purposes of the 'Safe Harbor' Provisions of the PrivateSecurities Litigation Reform Act of 1995."

 CITY NATIONAL CORPORATION CONSOLIDATED BALANCE SHEET (unaudited) (Dollars in thousands, except per share amount) June 30, 2001 2000 %ChangeAssets Cash and due from banks $ 441,665 $ 448,501 (2) Securities 1,681,233 1,442,108 17 Federal funds sold 10,000 50,000 (80) Loans (net of allowance for credit losses of $133,883 and $140,484) 6,433,487 6,204,711 4 Other assets 557,208 531,448 5 Total assets $ 9,123,593 $ 8,676,768 5Liabilities and Shareholders' Equity Noninterest-bearing deposits $ 3,134,792 $ 2,678,556 17 Interest-bearing deposits 3,945,842 3,716,298 6 Total deposits 7,080,634 6,394,854 11 Federal funds purchased and securities sold under repurchase agreements 261,849 243,604 7 Other short-term borrowed funds 653,125 955,163 (32) Subordinated debt 118,939 123,547 (4) Other long-term debt 94,255 180,000 (48) Other liabilities 98,951 107,578 (8) Total liabilities 8,307,753 8,004,746 4 Shareholders' equity 815,840 672,022 21 Total liabilities and shareholders' equity $ 9,123,593 $ 8,676,768 5 Book value per share $ 17.04 $ 14.11 21 Number of shares at period end 47,888,923 47,623,014 1 CONSOLIDATED STATEMENT OF INCOME (unaudited) (Dollars in thousands, except per share amount) For the three For the six months ended months ended June 30, June 30, 2001 2000 % 2001 2000 % Change ChangeInterest income $ 156,490 $ 164,076 (5) $ 320,682 $ 306,143 5Interest expense (51,441) (59,432) (13) (110,716) (109,252) 1Net interest income 105,049 104,644 - 209,966 196,891 7Provision for credit losses (6,500) (4,000) 63 (14,000) (4,000) 250Net interest income after provision for credit losses 98,549 100,644 (2) 195,966 192,891 2Noninterest income 32,894 26,790 23 64,155 51,033 26Noninterest expense (79,012) (76,074) 4 (155,616) (145,159) 7Income before taxes 52,431 51,360 2 104,505 98,765 6Income taxes (16,087) (17,915) (10) (34,570) (34,312) 1Net income $ 36,344 $ 33,445 9 $ 69,935 $ 64,453 9Net income per share, basic $ 0.76 $ 0.70 9 $ 1.47 $ 1.38 7Net income per share, diluted $ 0.74 $ 0.68 9 $ 1.43 $ 1.34 7Dividends paid per share $ 0.19 $ 0.18 6 $ 0.37 $ 0.35 6Cash net income $ 40,300 $ 37,154 8 $ 77,832 $ 71,054 10Cash net income per share, basic $ 0.84 $ 0.78 8 $ 1.63 $ 1.52 7Cash net income per share, diluted $ 0.82 $ 0.76 8 $ 1.59 $ 1.48 7Shares used to compute per share net income, basic 47,768,235 47,540,159 47,725,720 46,791,844Shares used to compute per share net income, diluted 49,218,635 48,936,743 49,026,705 47,986,361 CITY NATIONAL CORPORATION SELECTED FINANCIAL INFORMATION (unaudited) (Dollars in thousands)Period end June 30, 2001 2000 % ChangeLoans Commercial (a) $ 2,902,807 $ 2,782,611 4 Residential first mortgage 1,407,621 1,238,224 14 Real estate mortgage 1,582,691 1,395,187 13 Real estate construction 490,146 421,178 16 Installment 73,569 65,702 12 Total relationship loans 6,456,834 5,902,902 9 Syndicated non- relationship (a) 110,536 442,293 (75) Total loans $ 6,567,370 $ 6,345,195 4(a)Commercial loans were $2,939,893 and syndicated non-relationship loans were $148,318 at March 31, 2001Deposits Noninterest bearing $ 3,134,792 $ 2,678,556 17 Interest-bearing, core 2,587,181 2,374,630 9 Total core deposits 5,721,973 5,053,186 13 Time deposits - $100,000 and over 1,358,661 1,341,668 1 Total deposits $ 7,080,634 $ 6,394,854 11Credit Quality Nonaccrual loans and ORE (b) Relationship loans $ 28,942 $ 31,735 (9) Syndicated non- relationship loans 8,143 3,342 144 37,085 35,077 6 ORE 1,212 447 171 Total nonaccrual loans and ORE $ 38,297 $ 35,524 8 Relationship nonaccrual loans and ORE to total relationship loans and ORE 0.47 0.55 (15) Total nonaccrual loans and ORE to total loans and ORE 0.58 0.56 4 Loans past due 90 days or more on accrual status $ 13,107 $ 5,703 130 Restructured loans on accrual status $ 1,463 $ 2,532 (42)(b)Nonaccrual loans were $52,729 at March 31, 2001 including $35,986 of relationship loans and $16,743 of syndicated non-relationship loansAllowance for Credit Losses For the three For the six months ended months ended June 30, June 30, 2001 2000 % 2001 2000 % Change ChangeBeginning balance $ 134,727 $ 140,450 (4) $ 135,435 $ 134,077 1 Additions from acquisitions - -- - -- 9,927 (100) Provision for credit losses 6,500 4,000 63 14,000 4,000 250 Charge-offs(c) Relationship loans (7,725) (5,688) 36 (17,708) (10,181) 74 Syndicated non- relationship loans (3,113) (3,166) (2) (5,214) (4,232) 23 (10,838) (8,854) 22 (22,922) (14,413) 59 Recoveries(d) 3,494 4,888 (29) 7,370 6,893 7 Net charge- offs (7,344) (3,966) 85 (15,552) (7,520) 107Ending Balance $ 133,883 $ 140,484 (5) $ 133,883 $ 140,484 (5)Net relationship charge-offs to average relationship loans (annualized) (0.27)% (0.06)% 350 (0.34)% (0.12)% 183Total net charge-offs to average loans (annualized) (0.45) (0.25) 80 (0.48) (0.25) 92Allowance for credit losses to total loans 2.04 2.21 (8)Allowance for credit losses to nonaccrual loans 361.02 400.50 (10)(c)Charge-offs in the first quarter 2001 were $9,983 in relationship loans and $2,101 in syndicated non-relationship loans(d)Includes $44 and $275 in syndicated non-relationship loans forthe second quarter and first half of 2001, respectively CITY NATIONAL CORPORATION SELECTED FINANCIAL INFORMATION (unaudited) (Dollars in thousands except per share amounts) For the three For the six months ended months ended June 30, June 30, 2001 2000 % 2001 2000 % Change ChangeAverage BalancesLoans Commercial $2,948,989 $2,815,521 5 $2,970,896 $2,611,147 14 Residential first mortgage 1,338,909 1,225,906 9 1,315,175 1,216,906 8 Real estate mortgage 1,594,040 1,336,108 19 1,557,778 1,238,711 26 Real estate construction 446,949 403,339 11 457,939 390,386 17 Installment 74,691 62,441 20 73,961 62,614 18 Total relationship loans 6,403,578 5,843,315 10 6,375,749 5,519,764 16 Syndicated non- relationship 133,797 488,406 (73) 153,838 516,266 (70) Total loans $6,537,375 $6,331,721 3 $6,529,587 $6,036,030 8Securities $1,690,786 $1,381,920 22 $1,624,282 $1,295,400 25Interest- earning assets 8,308,244 7,768,320 7 8,212,922 7,387,367 11Assets 9,132,024 8,525,861 7 9,026,738 8,093,736 12Core deposits 5,510,106 5,072,101 9 5,322,092 4,796,929 11Deposits 6,975,066 6,277,831 11 6,881,386 5,977,097 15Shareholders' equity 797,398 660,325 21 781,146 629,246 24Noninterest income Trust and investment fee revenue $ 14,779 $ 11,825 25 $ 28,452 $ 22,782 25 Cash management and deposit transaction fees 7,583 5,749 32 14,131 11,306 25 International services 3,840 3,749 2 7,399 7,057 5 Bank owned life insurance 697 657 6 1,421 1,278 11 Other 4,565 4,815 (5) 9,588 8,387 14 Subtotal - recurring 31,464 26,795 17 60,991 50,810 20 Gain on sale of loans and assets / debt repurchase 891 - N/M 1,648 5 N/M Gain (loss) on sale of securities 539 (5) N/M 1,516 218 595 Total $ 32,894 $ 26,790 23 $ 64,155 $ 51,033 26Noninterest expense Salaries and other employee benefits $ 42,711 $ 41,587 3 $ 85,485 $ 80,438 6 All Other Professional 6,358 6,306 1 12,122 11,691 4 Net occupancy of premises 6,628 5,743 15 12,972 10,548 23 Information services 4,088 3,409 20 7,917 6,996 13 Marketing and advertising 3,316 3,621 (8) 5,897 6,324 (7) Depreciation 3,413 3,241 5 6,750 6,281 7 Office services 2,424 2,776 (13) 4,634 4,842 (4) Amortization of goodwill 3,220 2,974 8 6,427 5,232 23 Amortization of core deposit intangibles 1,405 1,405 - 2,809 2,636 7 Equipment 603 737 (18) 1,099 1,202 (9) Acquisition integration - 13 (100) - 1,322 (100) Other operating 4,846 4,262 14 9,504 7,647 24 Total all other 36,301 34,487 5 70,131 64,721 8 Total $ 79,012 $ 76,074 4 $ 155,616 $ 145,159 7Selected RatiosFor the Period Return on average assets 1.60% 1.58% 1 1.56% 1.60% (3) Return on average shareholders' equity 18.28 20.37 (10) 18.05 20.60 (12) Net interest margin 5.23 5.58 (6) 5.32 5.53 (4) Efficiency ratio 55.87 56.51 (1) 55.60 57.13 (3) Dividend payout ratio 24.39 24.85 (2) 25.28 25.18 - Cash return on average assets 1.81 1.79 1 1.78 1.80 (1) Cash return on average shareholders' equity 26.40 31.28 (16) 26.19 29.00 (10) Cash efficiency ratio 52.60 53.26 (1) 52.31 54.03 (3)Period End Tier 1 risk-based capital ratio 8.76 7.49 17 Total risk-based capital ratio 11.64 10.56 10 Tier 1 leverage ratio 6.97 6.19 13

CONTACT:City National Corp.
Frank Pekny, 310/888-6700 (Financial/Investors)
Mary Schaubert, 213/833-4710 (Media)
or
Abernathy MacGregor Group
Ian Campbell, 213/630-6550 (Financial/Investors)