LOS ANGELES, Apr 15, 2003 (BUSINESS WIRE) - City NationalCorporation (NYSE:CYN), parent company of wholly owned City NationalBank, today reported net income of $43.7 million, or $0.87 per share,for the first quarter of 2003 compared with net income of $44.2million, or $0.87 per share for the first quarter of 2002 on fewercommon shares outstanding this year.

FIRST-QUARTER HIGHLIGHTS

- Average deposits were up 18 percent from a year ago and 1 percent from the prior quarter.

- Average loan growth, which was up 7 percent from a year ago, was essentially level compared with the prior quarter due to ongoing economic uncertainties heightened by current world-wide events.

- Net interest income was up 5 percent from the first quarter of 2002.

- Noninterest income continued to increase, up 8 percent from a year ago and 4 percent from last quarter.

- The company strengthened its allowance for credit loss as nonaccrual loans increased.

- Exposure to purchased syndicated media and telecommunication outstanding loan balances declined 30 percent from December 31, 2002 to $49.9 million at March 31, 2003.

 First Quarter % Fourth Quarter$ in millions, except per Change share 2003 2002 2002Earnings Per Share $0.87 $0.87 - $0.87Net Income 43.7 44.2 (1) 44.4Return on Assets 1.54 % 1.73 % (11) 1.56 %Return on Equity 15.84 18.97 (16) 15.90

Return on average assets declined due to an increase in assets.The lower return on average shareholders' equity was due primarily toa higher level of shareholders' equity from retained net income andfrom the exercise of stock options, net of treasury share repurchases.

"Loans, deposits, and noninterest income all grew over the firstquarter of last year as the bank reached $12.0 billion in assets forthe first time," said Chief Executive Officer Russell Goldsmith. "Inlight of economic, market and geopolitical uncertainty in the quarterand our continuing commitment to credit quality, average loansremained near our record level of $8.0 billion set last quarter, andwe again strengthened our allowance for credit losses, raising theratio to 2.16 percent of our total loan portfolio.

"Two recent developments underscore our long-term commitment toprudently invest in our capabilities: the April 1, 2003 acquisition ofConvergent Capital Management, which increased assets under managementor administration to approximately $26 billion, and our sale of $225million in 10-year senior debt, which was very well received in themarketplace. As California's Premier Private and Business Bank, CityNational remains well positioned to deliver solid results over thelong term, with our compelling business model and resources, ourstrong client base and banking professionals, and the manyopportunities in our markets."

ASSETS

Average assets reached $11.5 billion for the first quarter of2003, an increase of 11 percent over the $10.3 billion in averageassets for the first quarter of 2002 and 1 percent over the $11.3billion in average assets for the fourth quarter of 2002. Total assetsat March 31, 2003 increased 7 percent to a record $12.0 billion from$11.2 billion at March 31, 2002.

REVENUES

Revenues (net interest income plus noninterest income) increased 6percent to $167.2 million in the first quarter of 2003 from $157.6million in the first quarter of 2002, due in part to the acquisitionof Civic BanCorp ("Civic") in February 2002. However, they decreased 1percent from the fourth quarter of 2002, reflecting, in part, thefewer days in the first quarter.

NET INTEREST INCOME

Net interest income reached $131.9 million on a fullytaxable-equivalent basis, up 5 percent from $125.4 million in thefirst quarter of 2002. Average deposits continued to increase over theprior-year quarter as well as from the prior quarter. Loans grew overthe same period last year. However, they were essentially levelcompared with the prior quarter due to continuing economicuncertainties heightened by current world-wide events. As a result,the net interest margin narrowed as excess funding, includingprepayments of higher yielding fixed-rate assets, was invested inlower yielding available-for-sale short-term securities.

 First Quarter Fourth % Quarter$ in millions 2003 2002 Change 2002Average Loans $7,964.3 $7,465.4 7 $7,970.9Average Securities Available-For-Sale 2,441.8 1,924.5 27 2,117.9Average deposits 9,373.8 7,933.5 18 9,284.3Fully Taxable-Equivalent NetInterest Income 131.9 125.4 5 135.2Net interest Margin 5.07 % 5.34 % (5) 5.17 %

Compared with the prior-year first-quarter averages, commercialloans rose 4 percent, residential first mortgage loans rose 8 percent,real estate mortgage loans rose 11 percent, and real estateconstruction loans rose 9 percent, reflecting in part the impact ofthe purchase of Civic. Compared to the prior quarter, averageresidential first mortgage loans and construction loans increasedwhile commercial loans decreased, partly due to a reduction inpurchased syndicated media and telecommunication loan balances.

Average securities available-for-sale continued to increase as thedemand for loans slowed. As of March 31, 2003 unrealized gains onsecurities available-for-sale were $53.5 million.

During the first quarter of 2003, average core deposits - whichinclude all deposits except time deposits of $100,000 or more - roseto $8.3 billion, an increase of 26 percent over the $6.6 billionreported for the first quarter of 2002. They rose 2 percent over thefourth quarter of 2002. Average core deposits represented 89 percentof the total average deposit base for the first quarter of 2003,compared with 83 percent for the first quarter of 2002 and 88 percentfor the fourth quarter of 2002. New clients and higher client balancesmaintained as deposits to pay for services contributed to thecontinued growth of deposits.

As part of the company's long-standing asset liability managementstrategy, its "plain vanilla" interest rate swaps hedging loans,deposits and borrowings with a notional value of $1.0 billion added$7.5 million to net interest income in the first quarter of 2003,compared with $7.9 million in the first quarter of 2002 and $7.6million for the fourth quarter of 2002. These amounts included $4.5million, $3.2 million and $3.8 million, respectively, for interestswaps qualifying as fair-value hedges. Income from swaps qualifying ascash-flow hedges was $3.0 million for the first quarter of 2003,compared with $4.7 million for the first quarter of 2002 and $3.8million for the fourth quarter of 2002. Income from existing swapsqualifying as cash flow hedges of loans expected to be recorded in netinterest income within the next 12 months is $7.6 million.

Interest income recovered on nonaccrual and charged-off loansincluded above was $0.6 million for the first quarter of 2003,compared with $0.4 million for the first quarter of 2002 and $0.9million for the fourth quarter of 2002, respectively.

The Bank's prime rate was 4.25 percent as of March 31, 2003,compared with 4.75 percent a year earlier.

NONINTEREST INCOME

The company continues to emphasize growth in noninterest income --which increased 8 percent to $39.0 million for the first quarter of2003, compared with $35.9 million for the first quarter of 2002.Noninterest income increased 4 percent over the fourth quarter of2002.

Noninterest income for the first quarter of 2003 was 23 percent oftotal revenues, compared with 23 percent for the first quarter of 2002and 22 percent for the fourth quarter of 2002.

Trust and Investment Fee Revenue First Quarter Fourth % Quarter$ in millions 2003 2002 Change 2002Assets Under Administration $19,840.8 $18,786.8 6 $19,513.3Assets Under Management(a) 6,978.0 7,265.2 (4) 7,407.0Trust and Investment Fee Revenue 15.5 14.3 8 16.0(a) Included above

The reduction in assets under management is primarily attributableto the fact that clients are maintaining lower balances inmoney-market accounts due to their low interest rates. New business inall other categories, aided by strong relative investment performance,offset the decline in assets caused by lower market values. Theyear-over-prior-year revenue increase was driven by higher balancesunder administration while the decrease from the prior quarter is theresult of fewer days - and therefore lower transaction volume - inthe first quarter.

Other Noninterest Income

Cash management and deposit transaction fees for the first quarterof 2003 increased 5 percent over both the first quarter and the fourthquarter of 2002. Strong growth in deposits, higher sales of cashmanagement products and the impact on fees of a reduction in theearnings credit on analyzed deposit accounts contributed to thisgrowth.

International services fees were up 14 percent over the prior-yearquarter but down 14 percent from the fourth quarter of 2002. Higherforeign exchange and standby letter of credit revenue fueled theyear-over-year revenue growth. Revenue fell from the fourth quarter of2002, however, as imports and exports declined amid security concerns,higher fuel costs and business uncertainty world-wide.

Other income includes $1.2 million of fees received from the saleof certain merchant credit card business.

Gains on the sale of loans and other assets and gains on the saleof securities for the first quarter of 2003 amounted to $1.3 millioncompared with $2.4 million for the first quarter of 2002 and $0.1million for the fourth quarter 2002.

NONINTEREST EXPENSE

Noninterest expense was $85.9 million in the first quarter of2003, up 9 percent from $78.8 million for the first quarter of 2002but down 3 percent from $88.5 million for the fourth quarter of 2002.Expenses grew over the same period last year primarily because of thecompany's continued growth, including the addition of Civic and costsassociated with additional colleagues primarily in Northern Californiaand New York. Fourth-quarter expenses included certain collectionactivity costs, start-up costs of the New York office, and costs toupgrade facilities and technology systems, which did not recur in thecurrent quarter.

The company's efficiency ratio for the first quarter of 2003 was50.28 percent, compared with 48.89 percent for the first quarter of2002 and 51.28 percent for the fourth quarter of 2002.

INCOME TAXES

The first-quarter 2003 effective tax rate was 31.6 percent,compared with 30.1 percent for all of 2002. The higher effective taxrate over the prior year reflects the absence of certain tax benefitsrecorded in 2002.

CREDIT QUALITY

During the first quarter of 2003, City National's loan portfoliocontinued to experience the effects of the economy. Net charge-offscame to $12.5 million, up from $7.0 million in the first quarter of2002, and included $5.3 million relating to the company's purchasedsyndicated media and telecommunication portfolio.

The company's March 31, 2003 purchased syndicated media andtelecommunication loan portfolio contained 16 loans with commitmentand outstanding balances of $78.8 million and $49.9 million,respectively. At just over one-half of 1 percent of the loanportfolio, these balances were down significantly from the comparablebalances of $108.1 million and $71.3 million, respectively, as ofDecember 31, 2002. In addition, two performing media andtelecommunication available-for-sale loans with commitment andoutstanding balances of $13.8 million and $10.4 million, respectively,as of March 31, 2003 are included in other assets. The sale of one ofthese loans closed in April at its carrying value and the sale of theother loan is expected to close in the second quarter at its carryingvalue.

 First Quarter Fourth % Quarter$ in millions 2003 2002 Change 2002Provision For Credit Losses $17.5 $11.0 59 $17.5Net Loan Charge-Offs 12.5 7.0 79 12.2Annualized Percentage of NetCharge-Offs to Average Loans 0.64 % 0.38 % 68 0.61 %Nonperforming Assets $99.9 $50.6 97 $72.0Percentage of Nonaccrual Loans and ORE to Total Loans and ORE 1.28 % 0.65 % 97 0.90 %Allowance for Credit Losses $169.5 $155.7 9 $164.5Percentage of Allowance for Credit Losses to Outstanding Loans 2.16 % 2.01 % 7 2.06 %Percentage of Allowance for Credit Losses to Nonaccrual Loans 169.93 310.47 (45) 230.53

Nonperforming assets reached $99.9 million at March 31, 2003, upfrom $50.6 million at the end of the first quarter of 2002. Most ofthe $27.9 million increase in nonperforming asset balances for thequarter came from 5 nonaccrual commercial loans. Approximatelyone-third of March 31, 2003 nonperforming assets related to purchasedsyndicated loans, including purchased syndicated media andtelecommunication loans. One-third related to loans to NorthernCalifornia clients, and the remaining one-third related to otherborrowers. There were 4 purchased syndicated media andtelecommunication loans totaling $11.3 million on nonaccrual status atMarch 31, 2003, compared with 5 loans totaling $15.9 million atDecember 31, 2002.

The higher provision for credit losses over the first quarter of2002, which matched the provision for the fourth quarter of 2002,primarily reflects increasing nonaccrual loan levels, charge-offs,management's ongoing assessment of the credit quality of the portfolioand the first-quarter economic environment, most notably including thecontinuing weakness in Northern California and some of the loans inthe company's aircraft lessor portfolio. All aircraft lessor loans arecurrent and none are on nonaccrual as of March 31, 2003. The companyincreased its allowance for credit losses to $169.5 million, or 2.16percent of outstanding loans. Management believes the allowance forcredit losses is adequate to cover risks in the portfolio at March 31,2003.

OUTLOOK

Management has updated its guidance based on the current uncertaineconomic and geopolitical conditions as of April 15, 2003. Inaddition, the April 1, 2003 acquisition of Convergent CapitalManagement impacts the current guidance for noninterest income andnoninterest expense. Given the above, management now currently expectsnet income per diluted common share for 2003 to be approximately 5 to8 percent higher than net income per diluted common share for 2002based on the business indicators below:

 - Average loan growth 2 to 5 percent - Average deposit growth 6 to 9 percent - Net interest margin 5.00 to 5.10 percent - Provision for credit losses $65 million to $75 million - Noninterest income growth 18 to 21 percent - Noninterest expense growth 9 to 12 percent - Effective tax rate 31 to 33 percent CAPITAL LEVELS

Total risk-based capital and Tier 1 risk-based capital ratios atMarch 31, 2003 were 14.46 percent and 10.30 percent, compared with theminimum "well-capitalized" capital ratios of 10 percent and 6 percent,respectively. The company's Tier 1 leverage ratio at March 31, 2003 of7.65 percent exceeded the regulatory minimum of 4 percent required fora "well-capitalized" institution. Total risk-based capital, Tier 1risk-based capital and the Tier 1 leverage ratios at December 31, 2002were 14.26 percent, 9.87 percent and 7.55 percent, respectively.

STOCK REPURCHASE

On January 22, 2003, the Board of Directors authorized a 1million-share stock buyback program. During the first quarter of 2003,212,800 shares were repurchased under this program at an average priceof $44.59 per share. The company repurchased an additional 292,500under its prior stock buyback program bringing the total number ofshares repurchased in the quarter to 505,300 shares. The sharespurchased under the buyback programs will be reissued foracquisitions, upon the exercise of stock options, and for othergeneral corporate purposes. There were 1,694,129 treasury shares atMarch 31, 2003.

NOTE: City National Corporation will host a conference call thisafternoon to discuss results for the first quarter of 2003. 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 (877) 313-6466. A listen-only live broadcast of the call alsowill be available on the investor relations page of the company'swebsite at www.cnb.com. There, it will be archived and available fortwo weeks.

ABOUT CITY NATIONAL

City National Corporation (NYSE:CYN) is a financial servicescompany with $12.0 billion in total assets. Its wholly ownedsubsidiary, City National Bank, is the second largest independent bankheadquartered in California. As California's Premier Private andBusiness Bank(SM), City National provides banking, investment andtrust services through 54 offices and 12 full-service regional centersin Southern California and the San Francisco Bay Area including anoffice in New York City. The company has more than $19 billion ininvestment and trust assets under management or administration atMarch 31, 2003.

For more information about City National, visit the company's Website at cnb.com, http://www.cnb.com/.

This news release contains forward-looking statements about thecompany for which the company claims the protection of the safe harborprovisions contained in the Private Securities Litigation Reform Actof 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 market, (4)higher-than-expected credit losses, (5) earthquake or other naturaldisasters impacting the condition of real estate collateral, (6) theeffect of acquisitions and integration of acquired businesses, (7)unanticipated changes in regulatory, judicial, or legislative taxtreatment of business transactions, (8) unknown economic impactscaused by the State of California's budget shortfall, and (9) economicuncertainty created by worldwide geopolitical unrest, hostilities andmilitary action, terrorist attacks and related events. Managementcannot predict at this time the severity or duration of the effects ofthe recent business slowdown on our specific business activities andprofitability. Weaker or a further decline in capital and consumerspending, and related recessionary trends could adversely affect ourperformance in a number of ways including decreased demand for ourproducts and services and increased credit losses. Likewise, changesin deposit interest rates, among other things, could slow the rate ofgrowth or put pressure on current deposit levels. Forward-lookingstatements speak only as of the date they are made, and the companydoes not undertake to update forward-looking statements to reflectcircumstances or events that occur after the date the statements aremade, or to update earnings guidance including the factors thatinfluence 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, 2002, and particularly the section of Management'sDiscussion and Analysis therein titled "Cautionary Statement forPurposes of the `Safe Harbor' Provisions of the Private SecuritiesLitigation Reform Act of 1995."

CITY NATIONAL CORPORATIONCONSOLIDATED BALANCE SHEET (unaudited)(Dollars in thousands, except per share amount) March, 2003 2002 % ChangeAssetsCash and due from banks $448,152 $426,846 5Federal funds sold 615,000 484,000 27Securities 2,608,072 2,064,949 26Loans (net of allowance for credit losses of $169,480 and $155,657) 7,663,343 7,596,367 1Other assets 677,905 645,187 5Total assets $12,012,472 $11,217,349 7Liabilities and Shareholders' EquityNoninterest-bearing deposits $4,625,439 $3,690,225 25Interest-bearing deposits 5,238,407 4,966,999 5Total deposits 9,863,846 8,657,224 14Federal funds purchased and securities sold under repurchase agreements 156,002 179,140 (13)Other short-term borrowed funds 140,125 793,625 (82)Subordinated debt 302,573 267,449 13Other long-term debt 274,001 194,389 41Other liabilities 154,236 126,519 22Total liabilities 10,890,783 10,218,346 7Shareholders' equity 1,121,689 999,003 12Total liabilities and shareholders' equity $12,012,472 $11,217,349 7Book value per share $23.09 $20.11 15Number of shares at period end 48,588,514 49,681,899 (2)CONSOLIDATED STATEMENT OF INCOME (unaudited)(Dollars in thousands, except per share amount) For the three months ended March, 2003 2002 % ChangeInterest income $145,676 $148,358 (2)Interest expense (17,459) (26,663) (35)Net interest income 128,217 121,695 5Provision for credit losses (17,500) (11,000) 59Net interest income after provision for credit losses 110,717 110,695 -Noninterest income 38,976 35,943 8Noninterest expense (85,887) (78,773) 9Income before taxes 63,806 67,865 (6)Income taxes (20,151) (23,629) (15)Net income $43,655 $44,236 (1)Net income per share, basic $0.89 $0.91 (2)Net income per share, diluted $0.87 $0.87 -Dividends paid per share $0.21 $0.20 5Shares used to compute per share net income, basic 48,778,986 48,690,024Shares used to compute per share net income, diluted 50,124,079 50,803,046CITY NATIONAL CORPORATIONSELECTED FINANCIAL INFORMATION (unaudited) (Dollars in thousands)Period end March, 2003 2002 % ChangeLoansCommercial $3,401,610 $3,548,545 (4)Residential first mortgage 1,762,629 1,679,969 5Real estate mortgage 1,920,209 1,840,060 4Real estate construction 676,618 606,768 12Installment 71,757 76,682 (6) Total loans $7,832,823 $7,752,024 1DepositsNoninterest-bearing $4,625,439 $3,690,225 25Interest-bearing, core 4,182,320 3,628,298 15 Total core deposits 8,807,759 7,318,523 20Time deposits - $100,000 and over 1,056,087 1,338,701 (21) Total deposits $9,863,846 $8,657,224 14Credit QualityNonaccrual loans and ORE Nonaccrual loans $99,738 $50,136 99 ORE 210 505 (58)Total nonaccrual loans and ORE $99,948 $50,641 97Total nonaccrual loans and ORE to total loans and ORE 1.28 0.65 97Loans past due 90 days or more on accrual status $1,871 $2,631 (29) For the three months endedAllowance for Credit Losses March, 2003 2002 % ChangeBeginning balance $164,502 $142,862 15Additions from acquisition - 8,787 -Provision for credit losses 17,500 11,000 59Charge-offs (14,882) (9,296) 60Recoveries 2,360 2,304 2 Net charge-offs (12,522) (6,992) 79Ending Balance $169,480 $155,657 9Total net charge-offs to average loans (annualized) (0.64) (0.38) 68Allowance for credit losses to total loans 2.16 2.01 7Allowance for credit losses to nonaccrual loans 169.93 310.47 (45)CITY NATIONAL CORPORATIONSELECTED FINANCIAL INFORMATION (unaudited) (Dollars in thousands) For the three months ended March, 2003 2002 % ChangeAverage BalancesLoansCommercial $3,560,411 $3,432,475 4Residential first mortgage 1,756,838 1,633,024 8Real estate mortgage 1,908,554 1,717,838 11Real estate construction 663,956 610,878 9Installment 74,579 71,215 5 Total loans $7,964,338 $7,465,430 7Securities $2,441,796 $1,924,543 27Interest-earning assets 10,539,123 9,519,670 11Assets 11,480,626 10,344,129 11Core deposits 8,326,485 6,600,710 26Deposits 9,373,839 7,933,481 18Shareholders' equity 1,117,573 945,778 18Noninterest incomeTrust and investment fee revenue $15,480 $14,274 8Cash management and deposit transaction fees 10,917 10,369 5International services 4,328 3,791 14Bank owned life insurance 714 673 6Other 6,205 4,469 39 Subtotal - core 37,644 33,576 12Gain on sale of loans and assets 102 1,679 (94)Gain on sale of securities 1,230 688 79 Total $38,976 $35,943 8Total revenue $167,193 $157,638 6Noninterest expenseSalaries and employee benefits $51,805 $47,470 9All OtherNet occupancy of premises 6,969 6,180 13Professional 6,436 5,229 23Information services 4,253 4,360 (2)Depreciation 3,119 3,392 (8)Marketing and advertising 3,112 2,788 12Office services 2,570 2,098 22Amortization of core deposit intangibles 1,976 1,515 30Equipment 666 482 38Acquisition integration 164 1,300 (87)Other operating 4,817 3,959 22 Total all other 34,082 31,303 9 Total $85,887 $78,773 9Selected RatiosFor the PeriodReturn on average assets 1.54 % 1.73 % (11)Return on average shareholders' equity 15.84 18.97 (16)Net interest margin 5.07 5.34 (5)Efficiency ratio (1) 50.28 48.89 3Dividend payout ratio 22.91 21.27 8Period EndTier 1 risk-based capital ratio 10.30 9.05 14Total risk-based capital ratio 14.46 13.55 7Tier 1 leverage ratio 7.65 7.31 5(1) The efficiency ratio is defined as noninterest expense excluding ORE expense divided by total revenue (net interest income on a tax-equivalent basis and noninterest income).
City National CorporationFrank Pekny, 310/888-6700 (Financial/Investors)Cary Walker, 213/833-4715 (Media)orAbernathy MacGregor GroupIan Campbell, 213/630-6550 (Financial/Investors)

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