First-half 2003 EPS of $1.80 up 3 percent from last year

LOS ANGELES, Jul 15, 2003 (BUSINESS WIRE) - City National Corporation (NYSE:CYN), parent company of whollyowned City National Bank, today reported net income of $46.1 million,or $0.93 per share, for the second quarter of 2003 compared with netincome of $45.8 million, or $0.88 per share, for the second quarter of2002 on fewer common shares outstanding this year.

For the first half of 2003, City National Corporation recorded netincome of $89.7 million, or $1.80 per share, compared with net incomeof $90.0 million, or $1.75 per share, reported for the first half of2002.

Also today, the Board of Directors of City National Corporationapproved a 37 percent increase in the company's quarterly common stockcash dividend. The new quarterly dividend of $0.28 per share is upfrom the $0.205 per share currently paid. It is the second time inseven months that City National has increased its dividend, which isnow 44 percent higher than when the year began. The current payoutratio of approximately 30 percent is within the 28 to 34 percent rangethat the company now intends to maintain going forward. The increaseddividend is payable on August 18, 2003, to shareholders of record onAugust 6, 2003.

In light of the fact that through its ongoing stock repurchaseprogram, the corporation has acquired 750,100 shares of the 1 millionpreviously authorized by the Board, management requested, and theBoard today authorized, the repurchase of 500,000 additional shares ofCity National Corporation stock, following completion of the company'scurrent buyback initiative. Shares will be repurchased on a selectivebasis from time to time in open market transactions. City NationalCorporation expects to use them for employee stock options, possiblefuture acquisitions and other general purposes. The corporation had48,156,797 shares outstanding on June 30, 2003.

HIGHLIGHTS

-- Average core deposits for the second quarter were up 21 percent from a year ago, up 5 percent from the prior quarter and up 23 percent for the first six months from the same period last year.

-- Average loans for the first six months were up 3 percent from the same period last year. However, average loans for the second quarter declined 1 percent from a year ago and were 2 percent lower than the prior quarter. These declines reflect the continued slow demand for commercial loans and the company's continuing attention to credit quality.

- Net interest income for the first half of 2003 increased 1 percent over the first half of 2002 but fell 3 percent in the second quarter compared with the year ago quarter. This decline is consistent with the compression in the net interest margin to 4.79 percent during the period.

-- Nonaccrual loans fell by $30.4 million, or 30 percent, from March 31, 2003 to $69.4 million, contributing to a lower provision for credit losses of $11.5 million for the second quarter of 2003.

- Exposure to syndicated non-relationship commercial and purchased media and telecommunication loans declined 40 percent from March 31, 2003 to $52.2 million at June 30, 2003.

- Fueled by the acquisition of Convergent Capital Management ("CCM") in April 2003, noninterest income continued to increase. It rose 16 percent over both the second quarter of 2002 and the first quarter of this year. For the first six months, noninterest income was up 13 percent from the same period last year.

"The strength of our earnings and capital position, coupled withnew, favorable tax rates and renewed investor interest in dividendyield, warrants, in our judgment, a significant increase in thedividend paid to our shareholders," said Chief Executive OfficerRussell Goldsmith. "This 37 percent dividend increase (and a 44percent total increase since the year began), combined with thedisciplined continuation of our stock repurchase program, deliversmeaningfully on our continuing commitment to build shareholder valuewhile still maintaining a strong balance sheet.

"The solid growth in our deposits, coupled with effective costcontrols and signs of improvement in the quality of our loanportfolio, produced good results in the second quarter despite lowerinterest rates and continuing cautiousness in the nation's economy. Inaddition, City National's long-term plan to increase noninterestincome, particularly from our wealth management business, took a stepforward with the second-quarter addition of Convergent CapitalManagement. Our assets under management grew 81 percent in one year."

 For the three months For the three$ in millions, ended June 30, months endedexcept per share ---------------------- % March 31, 2003 2002 Change 2003------------------------ ----------- ---------- ------ --------------Earnings Per Share $0.93 $0.88 6 $0.87Net Income 46.1 45.8 1 43.7Average Assets 11,914.9 10,934.3 9 11,480.6Return on Average Assets 1.55% 1.68% (8) 1.54%Return on Average Equity 16.33 17.53 (7) 15.84 For the six months ended$ in millions, June 30,except per share ------------------------- % 2003 2002 Change------------------ -------------- ---------- -------Earnings Per Share $1.80 $1.75 3Net Income 89.7 90.0 0Average Assets 11,698.9 10,640.8 10Return on Average Assets 1.55% 1.71% (9)Return on Average Equity 16.09 18.21 (12)

Return on average assets for the second quarter and the first sixmonths of 2003 declined due to an increase in average assets,primarily lower-yielding securities. The lower return on averageshareholders' equity was due primarily to a higher level ofshareholders' equity from retained net income, issuance of restrictedshares to colleagues, and from the exercise of stock options, net oftreasury share repurchases.

ASSETS

Average assets increased due to an increase in the securitiesportfolio. Total assets at June 30, 2003 increased 12 percent to arecord $12.4 billion from $11.0 billion at June 30, 2002.

REVENUES

Revenues (net interest income plus noninterest income) increased 2percent to $172.2 million in the second quarter of 2003 from $169.3million in the second quarter of 2002 and increased 3 percent from thefirst quarter of 2003 due in part to the acquisition of CCM in April2003. For the first half of 2003, revenues increased 4 percent to$339.4 million compared with $327.0 million for the first half of2002.

NET INTEREST INCOME

Net interest income for the second quarter of 2003 was $130.8million on a fully taxable-equivalent basis, a 3 percent decrease from$134.3 million in the second quarter of 2002 due to lower interestrates and lower commercial loan demand. Fully taxable-equivalent netinterest income for the first six months of 2003 was $262.6 millioncompared with $259.7 million for the first six months of 2002.

 For the three months For the three ended June 30, months ended$ in millions ----------------------- % March 31, 2003 2002 Change 2003------------------------ ----------- ----------- ------ -------------Average Loans $7,793.9 $7,889.0 (1) $7,964.3Average SecuritiesAvailable-For-Sale 2,900.8 2,029.7 43 2,441.8Average Deposits 9,774.9 8,551.2 14 9,373.8Average Core Deposits(1) 8,763.1 7,238.8 21 8,326.5Fully Taxable-EquivalentNet Interest Income 130.8 134.3 (3) 131.9Net Interest Margin 4.79% 5.35% (10) 5.07% For the six months ended June 30, ----------------------- %$ in millions 2003 2002 Change------------------------- ------------ ---------- ------Average Loans $7,878.6 $7,678.4 3Average SecuritiesAvailable-For-Sale 2,672.6 1,977.4 35Average Deposits 9,575.5 8,244.1 16Average Core Deposits(1) 8,546.0 6,921.5 23Fully Taxable-EquivalentNet Interest Income 262.6 259.7 1Net Interest Margin 4.93% 5.35% (8)(1) All deposits except time deposits of $100,000 or more

Second-quarter and year-to-date 2003 average deposits continued toincrease over the prior-year periods as well as from the priorquarter.

Average loans for the second quarter of 2003 declined comparedwith the same period last year and the prior quarter due to economicuncertainties and the emphasis on credit quality. However, averageloans for the first six months of 2003 increased over the same periodlast year.

The net interest margin narrowed due to a flattening yield curve,mortgage prepayment activity and low interest rates.

Compared with the prior-year second-quarter averages, commercialloans declined 8 percent, residential first mortgage loans rose 1percent, real estate mortgage loans rose 6 percent, and real estateconstruction loans rose 9 percent. Compared with the prior quarter,average real estate construction loans increased while all other loancategories fell. Compared with the first six months of 2002,commercial loans decreased 2 percent, residential first mortgage loansrose 4 percent, real estate mortgage loans rose 9 percent, and realestate construction loans rose 9 percent.

Average securities available-for-sale, principally with loweryields and shorter durations, continued to increase as deposits grewstrongly. As of June 30, 2003 unrealized gains on securitiesavailable-for-sale were $57.3 million.

Average core deposits represented 90 percent of the total averagedeposit base for the second quarter of 2003, compared with 85 percentfor the second quarter of 2002 and 89 percent for the first quarter of2003. New clients and higher client balances maintained as deposits topay for services contributed to the continued 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 $976.4 million,added $7.5 million to net interest income in the second quarter of2003. That compared with $8.5 million in the second quarter of 2002and $7.5 million for the first quarter of 2003. These amounts included$5.2 million, $3.7 million and $4.5 million, respectively, forinterest swaps qualifying as fair-value hedges. Income from swapsqualifying as cash-flow hedges was $2.3 million for the second quarterof 2003, compared with $4.8 million for the second quarter of 2002 and$3.0 million for the first quarter of 2003. For the first half of2003, interest rate swaps added $15.0 million to net interest income,compared with $16.4 million for the first half of 2002. These amountsinclude $9.7 million and $6.9 million, respectively, for interestswaps qualifying as fair value hedges. Income from existing swapsqualifying as cash flow hedges of loans expected to be recorded in netinterest income within the next 12 months is $8.5 million.

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

The Bank's prime rate was 4.00 percent as of June 30, 2003,compared with 4.75 percent a year earlier.

NONINTEREST INCOME

The company continues to emphasize growth in noninterest incomethrough both the development of its existing business as well as fromacquisitions. Noninterest income increased 16 percent to $45.1 millionfor the second quarter of 2003, compared with $38.7 million for thesecond quarter of 2002, primarily attributable to the acquisition ofCCM. Noninterest income increased 16 percent over the first quarter of2003. For the first half of 2003, noninterest income increased 13percent to $84.0 million compared with $74.7 million for the firsthalf of 2002.

Noninterest income as a percentage of total revenues for thesecond quarter and first half of 2003 was 26 percent and 25 percent,respectively, compared with 23 percent for the second quarter andfirst half of 2002 and 23 percent for the first quarter of 2003.

Trust and Investment Fee Revenue

 At or for For the six At or for the three the three months ended months ended June 30, months ended June 30,$ in millions ------------------- % March 31, --------- % 2003 2002 Change 2003 2003 2002 Change--------------- --------- --------- ------ --------- ---- ---- ------Trust and Investment Fee Revenue $21.5 $15.7 37 $15.5 $37.0 $30.0 23Assets Under Administration 26,237.3 18,271.1 44 19,840.8Assets Under Management(1)(2) 12,531.3 6,906.2 81 6,978.0(1) Included above in assets under administration(2) June 30, 2003 does not include an additional $1,896 million of assets under management for the CCM minority owned asset managers

Assets under management at June 30, 2003 increased primarily dueto the CCM acquisition in April 2003. New business in all othercategories, aided by strong relative investment performance and highermarket values, also contributed to the increase. Theyear-over-prior-year revenue increase for both second quarter andfirst six months of 2003 was driven by higher balances underadministration partially attributable to the acquisition of CCM.Increases in market values are reflected in fee income primarily on atrailing quarter basis.

Other Noninterest Income

Cash management and deposit transaction fees for both the secondquarter and first half of 2003 increased 6 percent over the sameperiods last year. Strong growth in deposits and higher sales of cashmanagement products contributed to this growth. Cash management anddeposit transaction fees for the second quarter of 2003 were slightlylower than they were in the first quarter when prior-year annual feeswere recognized.

International services fees for the second quarter 2003 were up 6percent over the same period last year and increased 16 percent fromthe first quarter of 2003. For the first half of 2003, internationalservices fees were 10 percent higher than the first half of 2002.Higher foreign exchange fueled the year-over-year and prior quarterrevenue growth while trade-finance revenue was down from 2002.

Gains on the sale of loans and other assets and gains on the saleof securities for the second quarter of 2003 amounted to $1.3 millioncompared with $1.5 million for the second quarter of 2002 and $1.3million for the first quarter of 2003. For the first half of 2003,$2.6 million in gains were realized compared with $3.9 million ingains for the first half of 2002.

NONINTEREST EXPENSE

Noninterest expense was $91.3 million in the second quarter of2003, up 10 percent from $82.9 million for the second quarter of 2002and 7 percent from $85.4 million for the first quarter of 2003.Expenses grew primarily because of the addition of CCM and to a lesserextent were due to the company's continued modest expansion,principally in New York.

During the quarter, stock-based compensation performance awardsfor 2002 were granted to colleagues of the company. These performanceawards for the first time included restricted stock grants with fewerstock options, which reduced the total number of shares awarded butbetter aligned the interests of shareholders and colleagues. Thecompany recorded $129,000 in expense for restricted stock awards inthe second quarter, and going forward expects to expense $387,000quarterly for this stock award.

Noninterest expense for the first half of 2003 increased 9 percentto $176.7 million compared with $161.6 million for the first half of2002.

The company's efficiency ratio for the second quarter of 2003 was52.53 percent, compared with 47.95 percent for the second quarter of2002 and 50.28 percent for the first quarter of 2003. The higherefficiency ratio is attributable to the acquisition of CCM. For thefirst half of 2003, the efficiency ratio was 51.42 percent comparedwith 47.95 percent for the first half of 2002.

INCOME TAXES

The first-half 2003 effective tax rate was 32.1 percent, comparedwith 30.1 percent for all of 2002. The higher effective tax rate overthe prior year reflects the absence of certain tax benefits recordedin the second half of 2002.

CREDIT QUALITY

Net charge-offs were $10.1 million, including $4.8 millionrelating to the company's syndicated non-relationship commercial andpurchased media and telecommunication loan portfolio. This compareswith $16.0 million and $9.7 million, respectively, for the secondquarter of 2002. For the first half of 2003, net charge-offs were$22.6 million, compared with $23.0 million in the same period lastyear.

 At or for the three months ended June 30, ---------------------------- %$ in millions 2003 2002 Change-------------------------------- ------------- -------------- -------Provision For Credit Losses $11.5 $18.0 (36)Net Loan Charge-Offs (10.1) (16.0) (37)Annualized Percentage of Net Charge-Offs to Average Loans 0.52 % 0.81 % (36)Nonperforming Assets $69.6 $64.9 7Percentage of Nonaccrual Loans and ORE to Total Loans and ORE 0.92 % 0.83 % 11Allowance for Credit Losses $170.9 $157.6 8Percentage of Allowance for Credit Losses to Outstanding Loans 2.25 % 2.01 % 12Percentage of Allowance for Credit Losses to Nonaccrual Loans 246.37 244.67 1 For the six At or for the months ended three June 30, months ended --------------- %$ in millions March 31, 2003 2003 2002 Change------------------------------ ---------------- ------- ------- ------Provision For Credit Losses $17.5 $29.0 $29.0 0Net Loan Charge-Offs (12.5) (22.6) (23.0) (2)Annualized Percentage of Net Charge-Offs to Average Loans 0.64 % 0.58 % 0.60 % (3)Nonperforming Assets $99.9Percentage of Nonaccrual Loans and ORE to Total Loans and ORE 1.28 %Allowance for Credit Losses $169.5Percentage of Allowance for Credit Losses to Outstanding Loans 2.16 %Percentage of Allowance for Credit Losses to Nonaccrual Loans 169.93

At June 30, 2003, the Company's loan portfolio includedapproximately $1.0 billion of credits to borrowers located in NorthernCalifornia, including approximately $600 million of loans managed inNorthern California offices. In addition, the portfolio included $52.2million of syndicated non-relationship commercial and purchased mediaand telecommunication loans, down from $87.1 million at March 31,2003.

Nonaccrual loans fell this quarter primarily due to payoffs andsales. Approximately 40 percent of the nonperforming assets were loansto Northern California clients as of June 30, 2003. Approximately 20percent were three syndicated non-relationship commercial andpurchased media and telecommunication loans totaling $14.7 million,which compared with nine loans totaling $34.0 million at March 31,2003. The remaining 40 percent were loans to other borrowers. Includedin other assets was one $3.6 million loan held-for-sale that wouldhave been classified as a nonperforming loan had it been included inloans at June 30, 2003. The loan was sold on July 1, 2003 at its netbook value.

The provision for credit losses primarily reflects decliningnonaccrual loan levels, charge-offs, management's ongoing assessmentof the credit quality of the portfolio and the economic environment,most notably in Northern California and in California's dairyindustry. The company's dairy portfolio contained $150 million inoutstanding loan balances as of June 30, 2003. All of these dairyloans are performing. Management believes the allowance for creditlosses is adequate to cover risks in the portfolio at June 30, 2003.

OUTLOOK

Management has updated its guidance in light of current lacklustereconomic conditions as of July 15, 2003 and the Federal ReserveBoard's recent rate reduction. The most significant revisions apply tothe company's expectations for average loan growth and the netinterest margin, which have been impacted much the same as otherfinancial institutions nationwide. Management now expects net incomeper diluted common share for 2003 to be approximately 4 to 6 percenthigher than net income per diluted common share for 2002 based on thebusiness indicators below:

 - Average loan growth flat to 2 percent - Average deposit growth 10 to 13 percent - Net interest margin 4.75 to 4.90 percent - Provision for credit losses $50 million to $65 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 atJune 30, 2003 were 14.45 percent and 10.21 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, 2003 of7.17 percent exceeded the regulatory minimum of 5 percent required fora "well-capitalized" institution. Total risk-based capital, Tier 1risk-based capital and the Tier 1 leverage ratios at March 31, 2003were 14.46 percent, 10.30 percent and 7.65 percent, respectively.

STOCK REPURCHASE

On January 22, 2003, the Board of Directors authorized a1-million-share stock buyback program. During the second quarter of2003, 537,300 shares were repurchased under this program at an averageprice of $41.64 per share. A total of 750,100 shares have beenrepurchased under this program at an average cost of $42.47 per share,leaving 249,900 shares available for repurchase. The shares purchasedunder the buyback programs will be reissued for acquisitions, upon theexercise of stock options, and for other general corporate purposes.There were 2,027,574 treasury shares at June 30, 2003.

NOTE: City National Corporation will host a conference call thisafternoon to discuss results for the second 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 also willbe available on the investor relations page of the company's websiteat www.cnb.com. There, it will be archived and available for 12months.

ABOUT CITY NATIONAL

City National Corporation is a financial services company with$12.4 billion in total assets. Its wholly owned subsidiary, CityNational Bank, is the second largest independent bank headquartered inCalifornia. As California's Premier Private and Business Bank(SM),City National provides banking, investment and trust services through54 offices and 12 full-service regional centers in Southern Californiaand the San Francisco Bay Area, plus an office in New York City. Thecompany has more than $26 billion in investment and trust assets undermanagement or administration at June 30, 2003.

For more information about City National, visit the company's Website at 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,terrorist attacks and related events. Management cannot predict atthis time the severity or duration of the effects of the recentbusiness 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 Quarterly Report on Form 10-Q for the quarter-endedMarch 31, 2003, 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) June 30, % 2003 2002 ChangeAssetsCash and due from banks $451,291 $442,343 2Federal funds sold 650,000 165,000 294Securities 3,080,721 1,988,817 55Loans (net of allowance for credit losses of $170,927 and $157,647) 7,419,299 7,696,883 (4)Other assets 753,522 689,377 9 Total assets $12,354,833 $10,982,420 12Liabilities and Shareholders' EquityNoninterest-bearing deposits $4,916,678 $3,973,435 24Interest-bearing deposits 5,250,128 4,823,732 9 Total deposits 10,166,806 8,797,167 16Federal funds purchased and securities sold under repurchase agreements 167,084 110,665 51Other short-term borrowed funds 115,125 421,125 (73)Subordinated debt 318,282 282,043 13Other long-term debt 283,954 169,144 68Other liabilities / minority interest 158,892 128,938 23 Total liabilities 11,210,143 9,909,082 13Shareholders' equity 1,144,690 1,073,338 7 Total liabilities and shareholders' equity $12,354,833 $10,982,420 12Book value per share $23.77 $21.41 11Number of shares at period end 48,156,797 50,122,921 (4)CONSOLIDATED STATEMENT OF INCOME (unaudited)(Dollars in thousands, except per share amount) For the three months For the six months ended ended June 30, % June 30, % 2003 2002 Change 2003 2002 ChangeInterest income $144,333 $155,511 (7) $290,009 $303,869 (5)Interest expense (17,209) (24,937) (31) (34,668) (51,600) (33)Net interest income 127,124 130,574 (3) 255,341 252,269 1Provision for credit losses (11,500) (18,000) (36) (29,000) (29,000) -Net interest income after provision for credit losses 115,624 112,574 3 226,341 223,269 1Noninterest income 45,052 38,738 16 84,028 74,681 13Noninterest expense (91,316) (82,874) 10 (176,728) (161,575) 9Minority interest (1,065) (85) N/M (1,540) (157) N/MIncome before taxes 68,295 68,353 - 132,101 136,218 (3)Income taxes (22,214) (22,593) (2) (42,365) (46,222) (8)Net income $46,081 $45,760 1 $89,736 $89,996 -Net income per share, basic $0.95 $0.92 3 $1.85 $1.82 2Net income per share, diluted $0.93 $0.88 6 $1.80 $1.75 3Dividends paid per share $0.21 $0.20 5 $0.41 $0.39 5Shares used to compute per share net income, basic 48,307,675 49,963,388 48,543,331 49,326,706Shares used to compute per share net income, diluted 49,524,367 52,082,511 49,824,223 51,442,779CITY NATIONAL CORPORATIONSELECTED FINANCIAL INFORMATION (unaudited) (Dollars in thousands)Period end June 30, 2003 2002 % ChangeLoansCommercial $3,232,780 $3,552,800 (9)Residential first mortgage 1,736,442 1,730,589 -Real estate mortgage 1,895,964 1,866,086 2Real estate construction 653,063 635,218 3Installment 71,977 69,837 3 Total loans $7,590,226 $7,854,530 (3)DepositsNoninterest-bearing $4,916,678 $3,973,435 24Interest-bearing, core 4,251,204 3,530,798 20 Total core deposits 9,167,882 7,504,233 22Time deposits - $100,000 and over 998,924 1,292,934 (23) Total deposits $10,166,806 $8,797,167 16Credit QualityNonaccrual loans and ORE Nonaccrual loans $69,377 (1) $64,432 8 ORE 173 460 (62)Total nonaccrual loans and ORE $69,550 $64,892 7Total nonaccrual loans and ORE to total loans and ORE 0.92 0.83 11Loans past due 90 days or more on accrual status $5,853 $3,257 80(1) Balance does not include a $3,625 loan held-for-sale in other assets as of June 30, 2003, which would have been classified as nonperforming had it been included in loans. The loan was sold on July 1, 2003 at its June 30, 2003 carrying value. For the three For the six months months ended endedAllowance for June 30, June 30, Credit Losses % % 2003 2002 Change 2003 2002 ChangeBeginning balance $169,480 $155,657 9 $164,502 $142,862 15Additions from acquisition - - - - 8,787 N/MProvision for credit losses 11,500 18,000 (36) 29,000 29,000 -Charge-offs (14,211) (17,861) (20) (29,093) (27,157) 7Recoveries 4,158 1,851 125 6,518 4,155 57Net charge-offs (10,053) (16,010) (37) (22,575) (23,002) (2)Ending Balance $170,927 $157,647 8 $170,927 $157,647 8Total net charge- offs to average loans (annualized) (0.52) (0.81) (36) (0.58) (0.60) (3)Allowance for credit losses to total loans 2.25 2.01 12Allowance for credit losses to nonaccrual loans 246.37 244.67 1CITY NATIONAL CORPORATIONSELECTED FINANCIAL INFORMATION (unaudited) (Dollars in thousands) For the three months ended June 30, 2003 2002 % ChangeAverage BalancesLoansCommercial $3,402,342 $3,687,873 (8)Residential first mortgage 1,733,015 1,718,680 1Real estate mortgage 1,906,995 1,791,314 6Real estate construction 679,541 622,223 9Installment 71,970 68,915 4 Total loans $7,793,863 $7,889,005 (1)Securities $2,900,785 $2,029,742 43Interest-earning assets 10,941,207 10,068,002 9Assets 11,914,869 10,934,265 9Core deposits 8,763,055 7,238,807 21Deposits 9,774,905 8,551,230 14Shareholders' equity 1,131,682 1,047,042 8Noninterest incomeTrust and investment fee revenue $21,505 $15,736 37Cash management and deposit transaction fees 10,660 10,025 6International services 5,019 4,719 6Bank owned life insurance 731 719 2Other 5,865 6,035 (3) Subtotal - core 43,780 37,234 18Gain on sale of loans and assets - 1,320 (100)Gain on sale of securities 1,272 184 591 Total $45,052 $38,738 16Total revenue $172,176 $169,312 2Noninterest expenseSalaries and employee benefits $54,516 $49,642 10All OtherNet occupancy of premises 7,862 6,495 21Professional 6,769 5,182 31Information services 4,302 4,661 (8)Depreciation 3,019 3,336 (10)Marketing and advertising 3,553 3,311 7Office services 2,398 2,731 (12)Amortization of intangibles 2,227 2,056 8Equipment 638 789 (19)Other operating 6,032 4,671 29 Total all other 36,800 33,232 11 Total $91,316 $82,874 10Selected RatiosFor the PeriodReturn on average assets 1.55 % 1.68 % (8)Return on average shareholders' equity 16.33 17.53 (7)Net interest margin 4.79 5.35 (10)Efficiency ratio (1) 52.53 47.95 10Dividend payout ratio 21.51 21.34 1 For the six months ended June 30, 2003 2002 % ChangeAverage BalancesLoansCommercial $3,480,938 $3,560,880 (2)Residential first mortgage 1,744,861 1,676,088 4Real estate mortgage 1,907,770 1,754,779 9Real estate construction 671,791 616,582 9Installment 73,267 70,059 5 Total loans $7,878,627 $7,678,388 3Securities $2,672,561 $1,977,433 35Interest-earning assets 10,741,276 9,795,351 10Assets 11,698,948 10,640,826 10Core deposits 8,545,977 6,921,521 23Deposits 9,575,481 8,244,062 16Shareholders' equity 1,124,667 996,690 13Noninterest incomeTrust and investment fee revenue $36,985 $30,010 23Cash management and deposit transaction fees 21,577 20,394 6International services 9,347 8,510 10Bank owned life insurance 1,445 1,392 4Other 12,070 10,504 15 Subtotal - core 81,424 70,810 15Gain on sale of loans and assets 102 2,999 (97)Gain on sale of securities 2,502 872 187 Total $84,028 $74,681 13Total revenue $339,369 $326,950 4Noninterest expenseSalaries and employee benefits $106,321 $97,112 9All OtherNet occupancy of premises 14,831 12,675 17Professional 13,205 10,411 27Information services 8,555 9,021 (5)Depreciation 6,138 6,728 (9)Marketing and advertising 6,665 6,099 9Office services 4,968 4,829 3Amortization of intangibles 4,203 3,571 18Equipment 1,304 1,271 3Other operating 10,538 9,858 7 Total all other 70,407 64,463 9 Total $176,728 $161,575 9Selected RatiosFor the PeriodReturn on average assets 1.55 % 1.71 % (9)Return on average shareholders' equity 16.09 18.21 (12)Net interest margin 4.93 5.35 (8)Efficiency ratio (1) 51.42 47.95 7Dividend payout ratio 22.19 21.30 4Period EndTier 1 risk-based capital ratio 10.21 9.74 5Total risk-based capital ratio 14.45 14.24 1Tier 1 leverage ratio 7.17 7.44 (4)(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).

SOURCE: City National Corporation

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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