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LOS ANGELES--(BUSINESS WIRE)--Jan. 14, 2004--City NationalCorporation (NYSE:CYN), parent company of wholly owned City NationalBank, today reported its eighth consecutive year of record net income.Net income totaled $186.7 million, or $3.72 per share in 2003,compared with net income of $183.1 million, or $3.56 per share, for2002. Earnings per share for 2003 grew 4.5 percent from 2002.

Fourth-quarter 2003 net income was $44.4 million, or $0.87 pershare, compared with net income of $44.4 million, or $0.87 per sharefor the fourth quarter of 2002 and $52.5 million, or $1.05 per share,for the third quarter of 2003.

HIGHLIGHTS

- While income before taxes increased by 12 percent, as previously announced by the company, certain net state tax benefits recorded in the first three quarters of 2003 of approximately $0.16 per share were reversed in the fourth quarter due to a December 31, 2003 tax announcement by the California Franchise Tax Board (FTB). No such benefits were taken in the fourth quarter. As a result of this matter, the company's income tax rate increased by approximately 3 percentage points for 2003 compared with 2002.

- The provision for credit losses of $29.0 million for 2003 was down 57 percent from $67.0 million for the prior year. No provision for credit losses was recorded for the fourth quarter of 2003 as a result of improved credit quality and the strength of our ratio of the allowance for credit losses to loans of 2.1 percent at December 31, 2003. Nonaccrual loans fell to $42.3 million, a 41 percent decline from December 31, 2002.

- Average core deposits for 2003 were up 22 percent from 2002. Fourth-quarter average core deposits were up 19 percent from the same period a year ago and 4 percent from the prior quarter.

- Average securities for 2003 were up 50 percent from 2002 due to significantly higher deposit balances. The average duration of the total available-for-sale securities portfolio at December 31, 2003 was 3.4 years.

- Period-end loan balances at December 31, 2003 increased $340.6 million from September 30, 2003, while average loans for all of 2003 were $93.5 million lower than 2002.

- Noninterest income excluding gains (losses) on sale of loans, assets, and debt repurchase and gain on sale of securities rose 20 percent in 2003 over 2002. This increase was, to a significant extent, due to the acquisition of Convergent Capital Management ("CCM") on April 1, 2003. Fourth-quarter noninterest income, excluding gains (losses) on the sale of loans, assets, and debt repurchase and gain on the sale of securities, was 27 percent higher than the fourth quarter of 2002 and 5 percent higher than the third quarter of 2003.

"As City National celebrates its 50th anniversary, it isnoteworthy that for the first time we now have $13 billion in bankassets, over $28 billion in client investment assets and eightconsecutive years of net income growth," said City NationalCorporation Chief Executive Officer Russell Goldsmith. "Income beforetaxes grew 12 percent over 2002, thanks to strengthening creditquality, dynamic deposit growth, and increasing noninterest income,despite challenging national economic conditions and a low interestrate environment.

"Another highlight of 2003 was the continuing expansion andconsolidation of our acquisitions in Northern California, where weinvested in new colleagues, offices and banking and wealth managementcapabilities. As economic conditions and loan demand have begun toimprove, we believe 2004 will be another year of growth and progressat City National Bank, California's Premier Private and BusinessBank."

 For the three months For the three months ended endedDollars in millions, December 31, % Sept. 30,except per share 2003 2002 Change 2003------------------------------ ---------- ---------- ------ ----------Earnings Per Share $0.87 $0.87 0 $1.05Net Income 44.4 44.4 0 52.5Average Assets 12,756.6 11,312.3 13 12,418.7Return on Average Assets 1.38 % 1.56 % (12) 1.68 %Return on Average Equity 14.69 15.90 (8) 18.28 For the twelve months endedDollars in millions, December 31, %except per share 2003 2002 Change----------------------------------------- ---------- ---------- ------Earnings Per Share $3.72 $3.56 4Net Income 186.7 183.1 2Average Assets 12,146.9 10,891.6 12Return on Average Assets 1.54 % 1.68 % (8)Return on Average Equity 16.27 17.45 (7)

Return on average assets for the year and fourth quarter of 2003declined from the same periods last year due to an increase in averageassets, primarily lower-yielding securities. The lower return onaverage shareholders' equity for the year was due primarily to ahigher level of shareholders' equity from retained net income and fromthe exercise of stock options, net of treasury share repurchases.

ASSETS

Average assets were higher, primarily due to an increase indeposits which were invested in the securities portfolio and, to alesser extent, federal funds sold and due from banks-interest bearing.Total assets at December 31, 2003 increased 10 percent to a record$13.0 billion from $11.9 billion at December 31, 2002.

REVENUES

Revenues (net interest income plus noninterest income) for theyear, increased 5 percent to $691.8 million compared with $661.5million for 2002, due to a significant extent to the acquisition ofCCM. Fourth-quarter revenues increased 6 percent to $178.5 millionfrom $168.9 million in the fourth quarter of 2002. They grew 3 percentfrom the third quarter of 2003.

NET INTEREST INCOME

Fully taxable-equivalent net interest income for the year was$529.0 million, compared with $530.1 million for 2002. Net interestincome for the fourth quarter of 2003 was $134.0 million on a fullytaxable-equivalent basis, a 1 percent decrease from $135.2 million inthe fourth quarter of 2002 due to lower interest rates and lowercommercial loan balances. However, fourth-quarter 2003 net interestincome on a fully taxable-equivalent basis increased 1 percent overthe preceding quarter.

 For the three For the three months months ended ended December 31, % Sept. 30,Dollars in millions 2003 2002 Change 2003----------------------------- ---------- ---------- ------ ----------Average Loans $7,605.4 $7,970.9 (5) $7,558.8Average Securities 3,424.3 2,089.2 64 3,114.1Average Deposits 10,694.0 9,284.3 15 10,320.8Average Core Deposits 9,737.3 8,175.5 19 9,323.5Fully Taxable-EquivalentNet Interest Income 134.0 135.2 (1) 132.4Net Interest Margin 4.52 % 5.17 % (13) 4.61 % For the twelve months ended December 31, %Dollars in millions 2003 2002 Change---------------------------------------------------- ---------- ------Average Loans $7,729.2 $7,822.7 (1)Average Securities 2,976.7 1,977.9 50Average Deposits 10,045.3 8,639.5 16Average Core Deposits 9,042.3 7,400.0 22Fully Taxable-EquivalentNet Interest Income 529.0 530.1 0Net Interest Margin 4.74 5.30 % (11)

Average loans for 2003 were slightly lower than 2002.Fourth-quarter 2003 average loans declined 5 percent from the sameperiod last year due to continued modest loan demand. However, averageloans increased 1 percent from the prior quarter. Compared with 2002averages, commercial loans decreased 7 percent; residential firstmortgage loans rose 4 percent, real estate mortgage loans rose 4percent; and real estate construction loans rose 2 percent. Comparedwith the prior-year fourth-quarter averages, commercial loans declined13 percent; residential first mortgage loans rose 8 percent; realestate mortgage loans decreased 1 percent; and real estateconstruction loans decreased 6 percent. Compared with the priorquarter, average residential first mortgage loans and real estatemortgage loans increased while all other loan categories decreased.

Period-end December 31, 2003 loans increased $340.6 million fromSeptember 30, 2003, reflecting growth in all loan categories exceptinstallment loans.

Average securities, principally with low current yields and shortmaturities, increased 50 percent for the year and 64 percent for thefourth quarter of 2003 compared with the same periods of 2002. Thereasons were higher deposit balances and modest loan demand. As ofDecember 31, 2003, unrealized gains on securities available-for-salewere $15.0 million. The average duration of total available-for-salesecurities at December 31, 2003 was 3.4 years compared to 3.2 years atSeptember 30, 2003 and 2.1 years at December 31, 2002.

Average deposits continued to increase. Average core depositsrepresented 90 percent and 91 percent of the total average depositbase for the year and fourth quarter of 2003, respectively. Thatcompares with 86 percent and 88 percent for the same periods of 2002and 90 percent for the third quarter of 2003. New clients and higherclient balances maintained as deposits to pay for services contributedto the continued growth of deposits.

The net interest margin continued to narrow, however, at a slowerrate in the fourth quarter, due to prepayment and refinancing activityand low interest rates.

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 $1.1 billion, added$31.5 million to net interest income in 2003, compared with $32.2million in 2002. These amounts included $21.6 million and $14.4million, respectively, for interest swaps qualifying as fair valuehedges. For the fourth quarter of 2003, interest rate swaps added $8.3million to net interest income, compared with $7.6 million in thefourth quarter of 2002 and $8.1 million for the third quarter of 2003.These net interest income amounts included $6.1 million, $3.8 millionand $5.8 million, respectively, for interest swaps qualifying asfair-value hedges. Income from swaps qualifying as cash-flow hedgeswas $2.2 million for the fourth quarter of 2003, compared with $3.8million for the fourth quarter of 2002 and $2.3 million for the thirdquarter of 2003. Income from existing swaps qualifying as cash flowhedges of loans expected to be recorded in net interest income withinthe next 12 months is $7.0 million.

Interest recovered on nonaccrual and charged off loans included innet interest income for the year 2003 was $2.7 million compared with$2.3 million for year 2002. Interest income recovered was $0.3 millionfor the fourth quarter of 2003, compared with $0.9 million for thefourth quarter of 2002 and $1.3 million for the third quarter of 2003.

The Bank's prime rate was 4.00 percent as of December 31, 2003,compared with 4.25 percent a year earlier.

NONINTEREST INCOME

The company continues to emphasize growth in noninterest incomethrough both the development of its existing business andacquisitions. For 2003, noninterest income including gains (losses) onthe sale of loans, assets and debt repurchase and gains on the sale ofsecurities increased to $177.2 million, up 21 percent from $146.3million for 2002, attributable to a significant extent to the CCMacquisition. Noninterest income increased to $47.9 million for thefourth quarter of 2003, up 28 percent from $37.4 million for thefourth quarter of 2002. Over the third quarter of 2003, noninterestincome was up 6 percent.

As a percentage of total revenues, noninterest income for the yearand fourth quarter of 2003 was 26 percent and 27 percent,respectively, compared with 22 percent for both the year and fourthquarter of 2002, and 26 percent for the third quarter of 2003.

Trust and Investment Fee Revenue

 At or for the At or for For the three months ended the three months twelve months Dec. 31, ended ended Dec. 31, Sept. 30, % %Dollars in Change Change millions 2003 2002 2003 2003 2002----------- ---------- --------- ------ --------- ------ ------ ------Trust and Investment Fee Revenue $23.3 $16.0 46 $23.4 $83.7 $61.3 37Assets Under Admini- stration 28,835.3 19,513.3 48 27,485.8Assets Under Management (1)(2) 13,610.8 7,407.0 84 12,653.0(1) Included above in assets under administration(2) Excludes $2,858 and $2,115 million of assets under managementfor the CCM minority owned asset managers as of December 31, 2003 andSeptember 30, 2003, respectively

Assets under management at December 31, 2003 increased, primarilydue to the CCM acquisition in April. New business, aided by strongrelative investment performance and higher market values, alsocontributed to the increase. The revenue increases for both the yearand fourth quarter of 2003 were driven by higher balances undermanagement or administration. Increases in market values are reflectedin fee income primarily on a trailing-quarter basis.

Other Noninterest Income

Cash management and deposit transaction fees for 2003 grew 5percent from the preceding year and increased slightly between thefourth quarters of 2002 and 2003. Strong growth in deposits and highersales of cash management products contributed to this growth. Cashmanagement and deposit transaction fees for the fourth quarter of 2003decreased 2 percent from the third quarter of 2003.

International services fees in 2003 were 6 percent higher than2002. International services fees for the fourth quarter of 2003 wereup 2 percent over the same period last year, and increased 6 percentfrom the third quarter of 2003. Higher foreign exchange income fueledthe year-over-year revenue growth while trade-finance revenue was downfrom 2002.

Included in other income was $4.0 million of participatingmortgage loan ("PML") fees in 2003 compared with $3.0 million in 2002.Fourth quarter 2003 PML fees were $2.6 million compared with $0.3million in the fourth quarter of 2002 and $0.9 million in the thirdquarter of 2003.

For 2003, the company realized $3.2 million in gains on the saleof loans, assets and debt repurchase and gains on the sale ofsecurities compared with $1.4 million in gains for 2002. A gain of$0.5 million was recorded for the fourth quarter of 2003, comparedwith a gain of $0.1 million for the fourth quarter of 2002. There wereessentially no gains for the third quarter of 2003.

NONINTEREST EXPENSE

Noninterest expense for the year 2003 amounted to $364.2 million,up 10 percent from $332.0 million for 2002. Noninterest expense was$95.1 million in the fourth quarter of 2003, up 8 percent from $88.2million for the fourth quarter of 2002 and up 3 percent from $92.3million for the third quarter of 2003. Expenses grew primarily becauseof the acquisition of CCM, the issuance of restricted stock awards tocolleagues in the second quarter of 2003 and, to a lesser extent, thecompany's expansion, principally into New York and new regionalcenters in Walnut Creek and Palo Alto. Excluding the expenses of CCMand City National's New York office, 2003 expenses were up 4 percentover 2002.

For 2003, the company's efficiency ratio was 52.15 percent,compared with 49.20 percent for 2002. The efficiency ratio for thefourth quarter of 2003 was 52.77 percent, compared with 51.28 percentfor the fourth quarter of 2002 and 52.92 percent for the third quarterof 2003. The increase in the efficiency ratio is primarilyattributable to the acquisition of CCM.

INCOME TAXES

The 2003 effective tax rate was 36.6 percent, compared with 30.1percent for 2002. The higher effective tax rate for 2003 reflectschanges in the mix of tax rates applicable to income before tax andthe absence of certain tax benefits recognized in 2002, includingbenefits related to the company's two previously disclosed real estateinvestment trusts (REITs). In the fourth quarter, the company reversedthe net state tax benefits recorded in the first three quarters of2003 and reflected no such benefits in the fourth quarter related toits REITs in accordance with accounting principles generally acceptedin the United States of America. The absence of these benefitsincreased the company's effective tax rate by approximately 3percentage points.

On December 31, 2003, the California Franchise Tax Board announcedits position that certain transactions related to REITs and regulatedinvestment companies (RICs) will be disallowed pursuant to CaliforniaSenate Bill 614 and Assembly Bill 1601. The company created its twoREITs (one of which was previously formed as a RIC in 2000) to raisecapital for its subsidiary bank. The company does not expect to recordany tax benefits relating to these transactions in 2004. The companyalso believes it is appropriately reserved for the benefits previouslyrecognized in the three prior years. The company and its financialadvisors believe that the company's position has merit and the companywill pursue its claims and defend its use of these entities andtransactions.

CREDIT QUALITY

The provision for credit losses of $29.0 million for 2003 was down57 percent from $67.0 million for the prior year. The company'sdecision to make no provision for credit losses in the fourth quarterof 2003 was attributable to the improving credit quality of itsportfolio; a decline in nonaccrual loan levels; the payment, chargeoff or sale of selected higher-risk credits; a lower level ofcharge-offs; higher-than-expected recoveries; management's ongoingassessment of the credit quality of the portfolio and a more stableeconomic environment. Management believes the allowance for creditlosses is adequate to cover risks in the portfolio at December 31,2003.

 At or for the At or for the three months ended three months ended Dec. 31, % Sept. 30, 2003 2002 Change 2003Dollars in millionsProvision For Credit Losses $- $17.5 (100) $-Net Loan Charge -Offs 0.2 12.2 (98) (4.7)Annualized Percentage of Net Charge-Offs to Average Loans 0.01 % 0.61 % (98) 0.25 %Nonperforming Assets $42.3 $72.0 (41) $54.7Percentage of Nonaccrual Loans and ORE to Total Loans and ORE 0.54 % 0.90 % (40) 0.72 %Allowance for Credit Losses $166.0 $164.5 1 $166.2Percentage of Allowance for Credit Losses to Outstanding Loans 2.11 % 2.06 % 2 2.20 %Percentage of Allowance for Credit Losses to Nonaccrual Loans 392.65 230.53 70 304.08 For the twelve months ended December 31, % ---------------Dollars in millions 2003 2002 Change------------------------------------------------------- ------- ------Provision For Credit Losses $29.0 $67.0 (57)Net Loan Charge-Offs 27.5 54.1 (49)Annualized Percentage of NetCharge-Offs to Average Loans 0.36 % 0.69 % (48)

For 2003, net charge-offs were $27.5 million, down from $54.1million for 2002. Net charge-offs for the fourth quarter of 2003 were$0.2 million, including $1.8 million related to the company'ssyndicated non-relationship commercial and purchased media andtelecommunication loan portfolio. This compares with $12.2 million and$7.7 million, respectively, for the fourth quarter of 2002.

Nonaccrual loans at December 31, 2003 were $42.3 million, down 41percent from $71.4 million at December 31, 2002. Nonaccrual loansdeclined 23 percent in the fourth quarter from the third quarter of2003, primarily due to payoffs. At December 31, 2003, approximately 33percent of the nonperforming assets were loans to Northern Californiaclients. Approximately 12 percent of nonperforming assets were 2syndicated non-relationship commercial and purchased media andtelecommunication loans totaling $5.0 million, which compared with 3loans totaling $8.7 million at September 30, 2003. Five percent of thecompany's year-end nonperforming assets were 2 dairy credits for $2.3million. The remaining 50 percent were loans to other borrowers withno major industry concentrations.

At December 31, 2003, the company's loan portfolio includedapproximately $964.0 million of credits to borrowers located inNorthern California, including approximately $496.0 million of loansmanaged in Northern California offices. In addition, the portfolioincluded approximately $152.0 million in outstanding dairy loans and$18.7 million of syndicated non-relationship commercial and purchasedmedia and telecommunication loans, the latter down from $31.2 millionat September 30, 2003.

OUTLOOK

Management currently expects net income per diluted common sharefor 2004 to be approximately 7 to 9 percent higher than net income perdiluted common share for 2003, based on current economic conditionsand the business indicators below:

- Average loan growth 6 to 9 percent

- Average deposit growth 6 to 9 percent

- Net interest margin 4.50 to 4.70 percent

- Provision for credit losses $20 million to $30 million

- Noninterest income growth 6 to 8 percent

- Noninterest expense growth 8 to 10 percent

- Effective tax rate 36 to 38 percent (1)

(1) Quarterly comparisons with the first three quarters of 2003will be impacted by the REIT state tax benefits which were reversed inthe fourth quarter of 2003.

CAPITAL LEVELS

Total risk-based capital and Tier 1 risk-based capital ratios atDecember 31, 2003 were 14.86 percent and 10.81 percent, compared withthe minimum "well-capitalized" capital ratios of 10 percent and 6percent, respectively. The company's Tier 1 leverage ratio at December31, 2003 was 7.48 percent. Total risk-based capital, Tier 1 risk-basedcapital and the Tier 1 leverage ratios at September 30, 2003 were14.94 percent, 10.76 percent and 7.37 percent, respectively.

STOCK REPURCHASE

On January 22, 2003, the Board of Directors authorized aone-million-share stock buyback program. No shares were repurchasedduring the fourth quarter of 2003. 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.On July 15, 2003, the Board of Directors authorized the repurchase of500,000 additional shares of City National Corporation stock,following completion of the Company's January 22, 2003 buybackinitiative. There were 1,225,569 treasury shares at December 31, 2003.

ABOUT CITY NATIONAL

City National Corporation is a financial services company with$13.0 billion in total assets. Its wholly owned subsidiary, CityNational Bank is California's Premier Private and Business Bank(SM).The bank provides banking, investment and trust services through 54offices, including 12 full-service regional centers, in SouthernCalifornia, the San Francisco Bay Area, and New York City.

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)other-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) theimpact of proposed and/or recently adopted changes in regulatory,judicial, or legislative tax treatment of business transactions,particularly recently enacted California tax legislation and thesubsequent December 31, 2003 announcement by the FTB regarding thetaxation of REITs and RICs, (8) an expansion of Bovine SpongiformEncephalopathy (better known as "Mad Cow" disease), and (9) unknowneconomic impacts caused by the State of California's budget issues.Management cannot predict at this time the severity or duration of theeffects of the recent business slowdown on our specific businessactivities and profitability. Weaker or a further decline in capitaland consumer spending, and related recessionary trends 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 Quarterly Report on Form 10-Q for the quarter-endedSeptember 30, 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."

NOTE: City National Corporation will host a conference call thisafternoon to discuss results for the year 2003. The call will begin at2:00 p.m. PDT. Analysts and investors may dial in and participate inthe question/answer session. To access the call, please dial (877)313-6466. A listen-only live broadcast of the call also will beavailable on the investor relations page of the company's website atwww.cnb.com. There, it will be archived and available for 12 months.

CITY NATIONAL CORPORATION----------------------------------------------------------------------CONSOLIDATED BALANCE SHEET (unaudited) (Dollars in thousands, except per share amount)---------------------------------------------------------------------- December 31, ------------------------------------ 2003 2002 % Change ------------ ------------ ----------Assets Cash and due from banks $461,443 $497,273 (7) Federal funds sold 240,000 460,000 (48) Due from banks - interest bearing 405,747 45,412 793 Securities 3,457,189 2,353,455 47 Loans (net of allowance for credit losses of $165,986 and $166,209) 7,716,756 7,834,968 (2) Other assets 737,107 679,284 9 ------------ ------------ Total assets $13,018,242 $11,870,392 10 ============ ============Liabilities and Shareholders' Equity Noninterest- bearing deposits $5,486,668 $4,764,234 15 Interest- bearing deposits 5,450,395 5,075,464 7 ------------ ------------ Total deposits 10,937,063 9,839,698 11 Federal funds purchased and securities sold under repurchase agreements 111,713 266,727 (58) Other short- term borrowed funds 15,125 125,125 (88) Subordinated debt 295,723 303,795 (3) Other long- term debt 280,565 68,682 308 Other liabilities / minority interest 158,797 156,406 2 ------------ ------------ Total liabilities 11,798,986 10,760,433 10 Shareholders' equity 1,219,256 1,109,959 10 ------------ ------------ Total liabilities and shareholders' equity $13,018,242 $11,870,392 10 ============ ============ Book value per share $24.85 $22.66 10 Number of shares at period end 49,060,593 48,983,431 -CONSOLIDATED STATEMENT OF INCOME (unaudited) (Dollars in thousands, except per share amount)---------------------------------------------------------------------- For the three months For the twelve months ended ended December December 31, 31, -------------------------------- -------------------------------- % % 2003 2002 Change 2003 2002 ChangeInterest income $143,355 $151,215 (5) $575,725 $609,700 (6)Interest expense (12,742) (19,752) (35) (61,110) (94,444) (35) ---------------------- ----------- -----------Net interest income 130,613 131,463 (1) 514,615 515,256 -Provision for credit losses - (17,500) (100) (29,000) (67,000) (57) ---------------------- ----------- -----------Net interest income after provision for credit losses 130,613 113,963 15 485,615 448,256 8Non-interest income 47,929 37,434 28 177,225 146,293 21Noninterest expense (95,117) (87,916) 8 (364,178) (331,646) 10Minority interest (782) (571) 37 (4,039) (945) 327 ---------------------- ----------- -----------Income before taxes 82,643 62,910 31 294,623 261,958 12Income taxes (38,205) (18,491) 107 (107,946) (78,858) 37 ---------------------- ----------- -----------Net income $44,438 $44,419 - $186,677 $183,100 2 ====================== =========== ===========Net income per share, basic $0.91 $0.90 1 $3.84 $3.69 4 ====================== =========== ===========Net income per share, diluted $0.87 $0.87 - $3.72 $3.56 4 ====================== =========== ===========Dividends paid per share $0.28 $0.20 40 $0.97 $0.78 24 ====================== =========== ===========Shares used to compute per share net income, basic 48,949,252 49,489,632 48,643,325 49,562,552Shares used to compute per share net income, diluted 50,965,884 50,773,446 50,197,722 51,389,475CITY NATIONAL CORPORATION----------------------------------------------------------------------SELECTED FINANCIAL INFORMATION (unaudited) (Dollars in thousands)----------------------------------------------------------------------Period end December 31, ----------------------------------- 2003 2002 % Change ------------ ----------- ----------Loans Commercial $3,222,444 $3,609,053 (11) Residential first mortgage 1,937,979 1,738,909 11 Real estate mortgage 2,002,229 1,934,409 4 Real estate construction 637,595 640,861 (1) Installment 82,495 76,238 8 ------------ ----------- Total loans $7,882,742 $7,999,470 (1) ============ ===========Deposits Noninterest- bearing $5,486,668 $4,764,234 15 Interest- bearing, core 4,510,194 4,038,497 12 ------------ ----------- Total core deposits 9,996,862 8,802,731 14 Time deposits - $100,000 and over 940,201 1,036,967 (9) ------------ ----------- Total deposits $10,937,063 $9,839,698 11 ============ ===========Credit Quality Nonaccrual loans and ORE Nonaccrual loans $42,273 $71,357 (41) ORE - 670 (100) ------------ ----------- Total nonaccrual loans and ORE $42,273 $72,027 (41) ============ =========== Total nonaccrual loans and ORE to total loans and ORE 0.54 0.90 (40) Loans past due 90 days or more on accrual status $2,043 $6,156 (67) ============ =========== For the three For the twelve months ended months endedAllowance for December December Credit 31, 31, Losses ------------------------------ ----------------------------- 2003 2002 % Change 2003 2002 % Change --------- --------- ---------- --------- --------- ---------Beginning balance $166,209 $159,173 4 $164,502 $142,862 15 Additions from acqui- sition - - - - 8,787 N/M Provision for credit losses - 17,500 (100) 29,000 67,000 (57) Charge-offs (3,330) (16,590) (80) (40,022) (64,015) (37) Recoveries 3,107 4,419 (30) 12,506 9,868 27 --------- --------- --------- --------- Net charge- offs (223) (12,171) (98) (27,516) (54,147) (49) --------- --------- --------- ---------Ending Balance $165,986 $164,502 1 $165,986 $164,502 1 ========= ========= ========= =========Total net charge-offs to average loans (annualized) (0.01) (0.61) (98) (0.36) (0.69) (48)Allowance for credit losses to total loans 2.11 2.06 2Allowance for credit losses to nonaccrual loans 392.65 230.53 70CITY NATIONAL CORPORATION----------------------------------------------------------------------SELECTED FINANCIAL INFORMATION (unaudited) (Dollars in thousands)---------------------------------------------------------------------- For the three months ended December 31, ---------------------------------- 2003 2002 % Change ----------- ----------- ----------Average BalancesLoans Commercial $3,129,296 $3,599,985 (13) Residential first mortgage 1,878,248 1,731,487 8 Real estate mortgage 1,899,634 1,911,839 (1) Real estate construction 614,300 651,386 (6) Installment 83,939 76,177 10 ----------- ----------- Total loans $7,605,417 $7,970,874 (5) =========== ===========Securities $3,424,291 $2,089,247 64Interest-earning assets 11,749,593 10,375,595 13Assets 12,756,557 11,312,332 13Core deposits 9,737,343 8,175,534 19Deposits 10,693,959 9,284,335 15Shareholders' equity 1,200,390 1,108,090 8Noninterest income Trust and investment fee revenue $23,317 $15,980 46 Cash management and deposit transaction fees 10,418 10,399 - International services 5,144 5,034 2 Bank owned life insurance 773 731 6 Other 7,781 5,170 51 ----------- ----------- Subtotal - core 47,433 37,314 27 Gain (loss) on sale of loans and assets/debt repurchase (40) (833) (95) Gain on sale of securities 536 953 (44) ----------- ----------- Total $47,929 $37,434 28 =========== ===========Total revenue $178,542 $168,897 6 =========== ===========Noninterest expense Salaries and employee benefits $55,912 $49,431 13 ----------- ----------- All Other Net occupancy of premises 8,435 8,109 4 Professional 7,204 8,791 (18) Information services 4,699 4,991 (6) Depreciation 3,343 3,195 5 Marketing and advertising 3,499 3,718 (6) Office services 2,485 2,692 (8) Amortization of intangibles 2,654 1,976 34 Equipment 519 593 (12) Other operating 6,367 4,420 44 ----------- ----------- Total all other 39,205 38,485 2 ----------- ----------- Total $95,117 $87,916 8 =========== ===========Selected RatiosFor the Period Return on average assets 1.38 % 1.56 % (12) Return on average shareholders' equity 14.69 15.90 (8) Net interest margin 4.52 5.17 (13) Efficiency ratio (1) 52.77 51.28 3 Dividend payout ratio 30.94 21.87 41Period End Tier 1 risk-based capital ratio - -- - Total risk-based capital ratio - -- - Tier 1 leverage ratio - -- --CITY NATIONAL CORPORATION----------------------------------------------------------------------SELECTED FINANCIAL INFORMATION (unaudited) (Dollars in thousands)---------------------------------------------------------------------- For the twelve months ended December 31, --------------------------------- 2003 2002 % Change ----------- ----------- ---------Average BalancesLoans Commercial $3,319,328 $3,580,293 (7) Residential first mortgage 1,781,006 1,704,571 4 Real estate mortgage 1,901,491 1,831,125 4 Real estate construction 647,851 634,074 2 Installment 79,474 72,590 9 ----------- ----------- Total loans $7,729,150 $7,822,653 (1) =========== ===========Securities $2,976,741 $1,977,948 50Interest-earning assets 11,159,034 9,996,998 12Assets 12,146,932 10,891,575 12Core deposits 9,042,255 7,399,970 22Deposits 10,045,267 8,639,546 16Shareholders' equity 1,147,477 1,049,393 9Noninterest income Trust and investment fee revenue $83,714 $61,277 37 Cash management and deposit transaction fees 42,656 40,722 5 International services 19,336 18,291 6 Bank owned life insurance 2,965 2,860 4 Other 25,402 21,702 17 ----------- ----------- Subtotal - core 174,073 144,852 20 Gain (loss) on sale of loans and assets/debt repurchase 78 (1,590) (105) Gain on sale of securities 3,074 3,031 1 ----------- ----------- Total $177,225 $146,293 21 =========== ===========Total revenue $691,840 $661,549 5 =========== ===========Noninterest expense Salaries and employee benefits $217,494 $195,652 11 ----------- ----------- All Other Net occupancy of premises 31,408 27,621 14 Professional 27,230 24,620 11 Information services 18,003 18,212 (1) Depreciation 12,796 13,191 (3) Marketing and advertising 13,224 13,076 1 Office services 9,957 9,752 2 Amortization of intangibles 9,222 7,523 23 Equipment 2,351 2,463 (5) Other operating 22,493 19,536 15 ----------- ----------- Total all other 146,684 135,994 8 ----------- ----------- Total $364,178 $331,646 10 =========== ===========Selected RatiosFor the Period Return on average assets 1.54 % 1.68 % (8) Return on average shareholders' equity 16.27 17.45 (7) Net interest margin 4.74 5.30 (11) Efficiency ratio (1) 52.15 49.20 6 Dividend payout ratio 25.33 21.10 20Period End Tier 1 risk-based capital ratio 10.81 9.87 10 Total risk-based capital ratio 14.86 14.26 4 Tier 1 leverage ratio 7.48 7.55 (1)(1) The efficiency ratio is defined as noninterest expense excludingORE expense divided by total revenue (net interest income on a tax-equivalent basis and noninterest income).

CONTACT: City National Frank Pekny, 310-888-6700 (Financial/Investors) Cary Walker, 213-833-4715 (Media) or Abernathy MacGregor Group (Financial/Investors) Ian Campbell, 213-630-6550 SOURCE: City National Corporation