To view and/or print a PDF version of this release, please click here.

To view and/or print a PDF version of the financial tables, please click here.

Assets Exceed $14 Billion for the First Time

LOS ANGELES--(BUSINESS WIRE)--Jan. 12, 2005-- City National Corporation (NYSE:CYN), parent company of whollyowned City National Bank, today reported its ninth consecutive year ofrecord net income. Net income totaled $206.3 million, or $4.04 pershare in 2004, compared with $186.7 million, or $3.72 per share in2003. Included in the results was an after-tax non-cash charge of $4.8million, or $0.09 a share, for "other-than-temporary impairment" onperpetual fixed-rate preferred securities that had no impact onshareholders' equity.

 2004 FINANCIAL HIGHLIGHTS - Average deposits grew 12 percent, exceeding $11 billion for the first time, and core deposits increased 15 percent over 2003. - Average loans exceeded $8 billion for the first time, an increase of $389.3 million, or 5 percent from the prior year. - Revenues increased 6 percent over 2003. - No provision for credit losses was recorded for 2004 due to continued strong credit quality. In 2003, the company recorded a provision for credit losses of $29.0 million. - Assets under management increased 19 percent to $16.2 billion, and assets under administration and management increased 22 percent to $35.1 billion. For the twelve months endedDollars in millions, December 31, %except per share 2004 2003 Change----------------------------------------- ---------- ---------- ------Earnings Per Share $4.04 $3.72 9Net Income 206.3 186.7 11Average Assets (1) 13,396.0 12,156.1 10Return on Average Assets (1) 1.54% 1.54% 0Return on Average Equity 16.34 16.27 0(1) As of September 30, 2004, the company reclassified the reserve for unfunded credit commitments from the allowance for loan losses to other liabilities. Amounts presented prior to the third quarter of 2004 have been reclassified to conform with the presentation in the current reporting period.

"We are pleased to report our ninth consecutive year of recordearnings and even greater strength in our capital position, creditquality, and other key metrics," said Chief Executive Officer RussellGoldsmith. "City National's double-digit net income growth over theprior year also reflected significant growth in deposits, primarilycore deposits, as well as higher noninterest income and the absence ofa provision for credit losses. We are particularly encouraged by asolid increase both in total loans and commercial loans in the fourthquarter.

"Completing our 50th year with over $14 billion in bank assets,these strong results demonstrate that City National has built a verysolid foundation for continuing growth. With our outstanding team of2,400 colleagues, we look forward to building additional shareholdervalue in 2005 by providing our clients with the excellent service andextensive capabilities of California's premier private and businessbank."

Fourth-quarter 2004 net income was $49.7 million, or $0.97 pershare, compared with $44.4 million, or $0.87 per share for the fourthquarter of 2003 and $53.5 million, or $1.04 per share for the thirdquarter of 2004. During the fourth quarter of 2003, $8.1 million, or$0.16 per share of net state tax benefits recognized during the firstthree quarters of 2003 relating to the company's two REITs, wasreversed. Included in fourth-quarter 2004 results was the after-taxnon-cash charge of $4.8 million, or $0.09 a share, for"other-than-temporary impairment" on perpetual fixed-rate preferredsecurities issued by government sponsored enterprises.

The following table shows the growth of earnings per share withand without the 2003 REITs tax charge and the 2004"other-than-temporary impairment" charge discussed above:

 For the three months ended December 31, % 2004 2003 Change------------------------------- ------------ -------------- --------Without the REITs Tax Charge and the "Other-Than-Temporary Impairment" Charge $1.06 $1.03 3With the REITs Tax Charge and the "Other-Than-Temporary Impairment" Charge $0.97 $0.87 11

During the fourth quarter of 2004, the company increased itsresources devoted to risk management to enhance its policies andprocedures to fully comply with the requirements of the Bank SecrecyAct, and the USA Patriot Act. Significant corrective results wereaccomplished in 2004 and these efforts will be enhanced during 2005.The company expects to enter into an agreement with bank regulators inthe near term pertaining to these matters but the company does notknow whether this will include any monetary assessment. The currentexpected expense of these compliance activities is included in thisannouncement's 2005 Outlook.

ASSETS

Average assets of $13.4 billion for 2004 were $1.2 billion, or 10percent higher than 2003, primarily due to an increase in averagesecurities and loans. Total assets at December 31, 2004 increased 9percent to $14.2 billion from $13.0 billion at December 31, 2003.

REVENUES

Revenues (net interest income plus noninterest income) for 2004increased 6 percent to $730.2 million due to higher net interestincome and wealth management fees.

NET INTEREST INCOME

Fully taxable-equivalent net interest income for 2004 was $559.5million, up 6 percent from $529.0 million for 2003. This, in part,reflected a 125-basis-point increase in interest rates during 2004 andin the growth of City National's loans and securities. The bank'sprime rate was 5.25 percent as of December 31, 2004. Net interestmargin was 4.54 percent in 2004, 20 basis points lower than it was in2003. The change was due to a 24 percent increase in holdings ofaverage securities as strong deposit growth exceeded the demand forloans during most of the year.

 For the twelve months ended December 31, %Dollars in millions 2004 2003 Change-------------------------- -------------- ---------------- ----------Average Loans $8,118.5 $7,729.2 5Average Securities 3,689.0 2,976.7 24Average Deposits 11,275.0 10,045.3 12Average Core Deposits 10,425.5 9,042.3 15Fully Taxable-Equivalent Net Interest Income 559.5 529.0 6Net Interest Margin 4.54% 4.74% (4)

Period-end December 31, 2004 loans increased $611.4 million fromDecember 31, 2003, reflecting growth in residential and commercialreal estate-related borrowings.

Compared with the prior-year averages, residential mortgage loansrose 17 percent, real estate construction loans rose 19 percent, andcommercial real estate mortgage loans rose 6 percent. Commercial loansdecreased 6 percent partially due to the virtual elimination of thecompany's dairy loan portfolio, which began the year at $151.7 millionand ended the year at $7.9 million.

The company's "plain vanilla" interest rate swaps, which are partof its long-standing asset-liability management strategy of hedgingloans, deposits and borrowings, were $1.3 billion at December 31,2004, compared with $1.1 billion at December 31, 2003 and $1.0 billionat September 30, 2004.

NONINTEREST INCOME

Noninterest income for 2004 was 4 percent higher than the prioryear due primarily to the strength of wealth management income. Thisincrease is attributable to higher trust and investment fees fromhigher assets under management or administration. Noninterest incomewas impacted by the $8.2 million non-cash charge on certain perpetualfixed-rate preferred securities. Noninterest income as a percentage oftotal revenues was 25 percent for 2004 and 26 percent for 2003.

Wealth Management

Trust and investment fees increased 45 percent over 2003 primarilydue to higher customer balances under management or administration.Assets under management at December 31, 2004 increased 19 percent to$16.2 billion from last year primarily due to new business, strongrelative investment performance, and higher market values. Results for2004 include the operation of Convergent Capital Management, LLC("CCM") for the entire year, while 2003 results only include theoperations of CCM beginning April 1, 2003, the date the acquisitionwas completed.

 At or for the twelve months ended December 31, %Dollars in millions 2004 2003 Change--------------------------------- ------------- ------------ ---------Trust and Investment Fee Revenue $68.4 $47.1 45Brokerage and Mutual Fund Fees 37.7 36.6 3Assets Under Management (1) 16,185.2 13,610.8 19Assets Under Administration and Management 35,092.7 28,835.3 22(1) Excludes $4,227 and $2,858 million of assets under management for the CCM minority owned asset managers as of December 31, 2004 and December 31, 2003, respectively

Other Noninterest Income

Cash management and deposit transaction fees totaled $41.4 millionin 2004, down 5 percent from 2003. Contributing to the year-over-yeardecrease were higher deposit balances maintained to offset fees and anincrease in the earnings credit for deposits under analysis.

International service fees for 2004 were 7 percent higher over theprior year primarily due to both higher letter of credit fees andforeign exchange income.

Other income for 2004 was 22 percent lower than 2003 primarily dueto lower participating mortgage loan fees. Participating mortgage loanfees are earned upon completion and repayment of debt for certain realestate construction projects. In these cases, City National lends aportion of the equity requirement and receives a share of the profitsin return.

For 2004, the company recorded $5.9 million in net losses on thesale of loans, assets and debt repurchase and on the sale or writedown of securities, compared with $3.2 million in gains for 2003.

NONINTEREST EXPENSE

Noninterest expense for 2004 totaled $395.4 million, a 9 percentincrease from 2003. The increase was due primarily to higherrestricted stock expense, net occupancy expense for premises andhigher risk management costs for complying with the Bank Secrecy Act,USA Patriot Act and Sarbanes-Oxley 404 requirements.

For 2004, the efficiency ratio was 53.89 percent compared with52.15 percent for 2003.

INCOME TAXES

The 2004 effective tax rate was 37.4 percent, compared with 36.6percent for 2003. The effective tax rate reflects changes in the mixof tax rates applicable to income before tax. As previously reported,the California Franchise Tax Board has taken the position that certainreal estate investment trust and registered investment company taxdeductions shall be disallowed under California law adopted in thefourth quarter of 2003. While management continues to believe that thetax benefits realized in previous years were appropriate, the companydeemed it prudent to participate in the statutory Voluntary ComplianceInitiative-Option 2, requiring payment of all California taxes andinterest on these disputed 2000 through 2002 tax years, and permittingthe company to claim a refund for these years while avoiding certainpotential penalties. The company's strategic and financial positionsremain unchanged from the previously reported period.

 FOURTH-QUARTER FINANCIAL HIGHLIGHTS - Average deposits and core deposits for the fourth quarter of 2004 grew 12 percent and 14 percent, respectively, from the fourth quarter of 2003. Average deposits and core deposits increased 4 percent over the third quarter of 2004 due to continued strong bank-wide growth. Average core deposits represented 93 percent of average deposit balances for the fourth quarter of 2004. - Fourth-quarter 2004 average loans increased 10 percent from the same period last year and 2 percent from the third quarter of 2004. Compared with the prior year fourth-quarter averages, residential mortgage loans rose 17 percent, commercial real estate mortgage loans rose 8 percent, and real estate construction loans rose 34 percent. Commercial loans were essentially unchanged partially due to the payoff of dairy loans previously announced. Compared with the third quarter of 2004, all loan categories increased. During the fourth quarter, loans increased from September 30, 2004 by $320.1 million, or 4 percent. - Revenue for the fourth quarter of 2004 increased 5 percent over the same period last year. The net interest margin for the fourth quarter of 2004 increased slightly to 4.54 percent from 4.52 percent for the year-ago quarter. It increased 8 basis points from the third quarter of 2004. - No provision for credit losses was recorded for the fourth quarter of 2004 due to continued strong credit quality. The fourth quarter of 2003 and the third quarter of 2004 also included no provision for credit losses. - Noninterest income for the fourth quarter of 2004 declined 13 percent to $41.8 million from the same period last year and decreased 12 percent from the third quarter of 2004 primarily due to the $8.2 million non-cash charge on the perpetual fixed-rate preferred securities. Wealth management fees continued to increase during the quarter. Noninterest income as a percentage of total revenues was 22 percent in the fourth quarter of 2004. - Fourth-quarter 2004 noninterest expense was up 13 percent from the fourth quarter of 2003 and 10 percent over the third quarter of 2004 due primarily to higher restricted stock expense, higher net occupancy expense for premises and higher risk management costs for complying with Bank Secrecy Act, USA Patriot Act and Sarbanes-Oxley 404 requirements. CREDIT QUALITY

The company made no provision for credit losses in 2004. This wasattributable to the continued strong credit quality of its $8.5billion loan portfolio, low level of net charge-offs, management'songoing assessment of the credit quality of the portfolio, and animproving economic environment. Nonaccrual loans as of December 31,2004 were $34.6 million, down 18 percent from December 31, 2003, anddown 2 percent from September 30, 2004.

At September 30, 2004, the company reclassified a portion of itsallowance for loan losses to reserve for unfunded commitments includedin other liabilities. The process used to determine the adequacy ofthe reserve for unfunded credit commitments is consistent with theprocess for the allowance for loan losses.

At December 31, 2004, the allowance for loan losses was $148.6million or 1.75 percent of outstanding loans. The reserve for unfundedcredit commitments was $11.8 million.

 At or for the twelve months ended December 31, %Dollars in millions 2004 2003 Change--------------------------------------------- -------- -------- ------Provision For Credit Losses $- $29.0 (100)Net Loan Charge-Offs 5.7 27.5 (79)Annualized Percentage of Net Charge-offs to Average Loans 0.07% 0.36% (81)Nonperforming Assets $34.6 $42.3 (18)Percentage of Nonaccrual Loans and ORE to Total Loans and ORE 0.41% 0.54% (24)Allowance for Loan Losses (1) $148.6 $156.0 (5)Reserve for Off-Balance Sheet Credit Commitments (1) $11.8 $10.0 18Percentage of Allowance for Loan Losses to Outstanding Loans (1) 1.75% 1.98% (12)Percentage of Allowance for Loan Losses to Nonaccrual Loans (1) 428.92 369.07 16(1) As of September 30, 2004, the company reclassified the reserve for unfunded credit commitments from the allowance for loan losses to other liabilities. Amounts presented prior to the third quarter of 2004 have been reclassified to conform with the presentation in the current reporting period.

OUTLOOK FOR 2005

Management currently expects the growth of net income per sharefor 2005 to be approximately 11 percent to 14 percent higher than netincome per share for 2004. This is based on current economicconditions, business indicators and an expectation that the Fed FundsRate will rise by an additional 75 basis points during 2005.

Average loans are expected to grow at a rate faster than in 2004while average deposits in 2005 are expected to grow at a slower ratethan in 2004. Net interest income in 2005 is expected to grow at amuch higher rate as a result of interest rate increases that occurredin 2004 and expected rate increases for 2005 as well as increased loanbalances. Management expects that a provision for credit losses willbe required in 2005 as average loan balances grow. Noninterest incomeis expected to grow at about the 2004 growth rate exclusive of the"other-than-temporary" impairment charge on securities. Noninterestexpense is expected to grow at about the same rate in 2005 comparedwith 2004. This includes higher risk management costs. It alsoincludes higher premises costs relating to the opening of three newoffices in Southern California as well as continuing consolidation ofoperations and colleagues at City National Plaza in downtown LosAngeles. Also expected to contribute to noninterest expense growth arethe continued recognition of the cost of restricted stock grants andthe cost of stock option expense beginning in the second half of 2005.The effective tax rate is expected to be about the same in 2005 as itwas in 2004.

CAPITAL LEVELS

Total risk-based capital and Tier 1 risk-based capital ratios atDecember 31, 2004 were 15.11 percent and 11.51 percent, compared withthe minimum "well capitalized" capital ratios of 10 percent and 6percent, respectively. The company's Tier 1 leverage ratio at December31, 2004 was 7.83 percent. Total risk-based capital, Tier 1 risk-basedcapital and the Tier 1 leverage ratios at September 30, 2004 were14.99 percent, 11.35 percent and 7.80 percent, respectively.

Shareholders' equity to assets as of December 31, 2004 was 9.5percent compared with 9.4 percent as of December 31, 2003.

Accumulated other comprehensive income at December 31, 2004 was aloss of $1.4 million compared with income of $12.9 million at December31, 2003, and $3.7 million at September 30, 2004. The average durationof total available-for-sale securities at December 31, 2004 was 3.0years compared to 3.4 years at December 31, 2003.

STOCK REPURCHASE

As previously announced, the company has board authorization torepurchase 1,009,500 of its outstanding shares as of December 31,2004. During 2004, 740,400 of outstanding shares were repurchased atan average cost of $59.19. There were no shares repurchased during thefourth quarter of 2004. There were 1,042,629 treasury shares atDecember 31, 2004.

CONFERENCE CALL

City National Corporation will host a conference call thisafternoon to discuss results for the year and fourth quarter of 2004.The call will begin at 2:00 p.m. PST or 5:00 p.m. EST. Analysts andinvestors may dial in and participate in the question/answer session.To access the call, please dial (866) 800-8652 and enter pass code16742230. 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.

ABOUT CITY NATIONAL

City National Corporation is a financial services company with$14.2 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 its52 offices, including 12 full-service regional centers, in SouthernCalifornia, the San Francisco Bay Area and New York City. The companyand its affiliates manage or administer $35.1 billion in client trustand investment assets, including $16.2 billion under management.

For more information about City National, visit the company'sWebsite 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) the unknown economic impact of state budget issues, (2) changes ininterest rates, (3) significant changes in banking laws orregulations, (4) the risk management costs of complying withSarbanes-Oxley 404 and with Anti-Money Laundering, USA Patriot Actrequirements, (5) increased competition in the company's market, (6)other-than-expected credit losses due to real estate cycles or othereconomic events, (7) earthquake or other natural disasters affectingthe condition of real estate collateral, (8) the effect ofacquisitions and integration of acquired businesses, and (9) theimpact of changes in regulatory, judicial, or legislative taxtreatment of business transactions. Management cannot predict at thistime the extent of the economic recovery, and a slowing or reversalcould adversely affect our performance in a number of ways includingdecreased demand for our products and services and increased creditlosses. Likewise, changes in deposit interest rates, among otherthings, could slow the rate of growth or put pressure on currentdeposit levels. Forward-looking statements speak only as of the datethey are made, and the company does not undertake to updateforward-looking statements to reflect circumstances or events thatoccur after the date the statements are made, or to update earningsguidance including the 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, 2004, 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 CORPORATION----------------------------------------------------------------------CONSOLIDATED BALANCE SHEET(unaudited)(Dollars in thousands, except per share amount)---------------------------------------------------------------------- December 31, September 30, 2004 2003 % Change 2004 ------------ ------------ -------- -------------Assets Cash and due from banks $240,492 $461,443 (48) $410,694 Federal funds sold 427,000 240,000 78 890,000 Due from banks - interest bearing 236,362 405,747 (42) 37,890 Securities 4,190,176 3,457,189 21 3,830,502 Loans (net of allowance for loan losses of $148,568; $156,015 and $148,056) (1) 8,345,619 7,726,727 8 8,026,081 Other assets 791,864 737,107 7 786,233 ------------ ------------ ------------ Total assets (1) $14,231,513 $13,028,213 9 $13,981,400 ============ ============ ============Liabilities and Shareholders' Equity Noninterest-bearing deposits $6,026,428 $5,486,668 10 $5,922,689 Interest-bearing deposits 5,960,487 5,450,395 9 5,942,864 ------------ ------------ ------------ Total deposits 11,986,915 10,937,063 10 11,865,553 Federal funds purchased and securities sold under repurchase agreements 204,654 111,713 83 71,570 Other short-term borrowed funds 125 65,135 (100) 50,125 Subordinated debt 288,934 295,723 (2) 291,073 Other long-term debt 230,416 230,555 - 231,882 Reserve for off- balance sheet credit commitments (1) 11,751 9,971 18 12,295 Other liabilities / minority interest 160,183 158,797 1 145,675 ------------ ------------ ------------ Total liabilities (1) 12,882,978 11,808,957 9 12,668,173 Shareholders' equity Common stock, paid-in capital, retained earnings, treasury shares and deferred equity compensation 1,349,887 1,206,353 12 1,309,544 Accumulated other comprehensive income (loss) (1,352) 12,903 (110) 3,683 ------------ ------------ ------------ Total shareholders' equity 1,348,535 1,219,256 11 1,313,227 ------------ ------------ ------------ Total liabilities and shareholders' equity (1) $14,231,513 $13,028,213 9 $13,981,400 ============ ============ ============ Book value per share $27.31 $24.85 10 $26.73 Number of shares at period end 49,378,904 49,060,593 1 49,127,167(1) As of September 30, 2004, the company reclassified the reserve for unfunded credit commitments from the allowance for loan losses to other liabilities. Amounts presented prior to the third quarter of 2004 have been reclassified to conform with the presentation in the current reporting period.CONSOLIDATED STATEMENT OF INCOME(unaudited)(Dollars in thousands, except per share amount)---------------------------------------------------------------------- For the three months ended December 31, 2004 2003 % Change ----------- ----------- ---------Interest income $162,919 $143,355 14Interest expense (17,619) (12,742) 38 ----------- -----------Net interest income 145,300 130,613 11Provision for credit losses - - - ----------- -----------Net interest income after provision for credit losses 145,300 130,613 11Noninterest income 41,789 47,929 (13)Noninterest expense (107,463) (95,117) 13Minority interest (584) (782) (25) ----------- -----------Income before taxes 79,042 82,643 (4)Income taxes (29,296) (38,205) (23) ----------- -----------Net income $49,746 $44,438 12 =========== ===========Net income per share, diluted $0.97 $0.87 11 =========== ===========Dividends paid per share $0.32 $0.28 14 =========== ===========Shares used to compute per share net income, diluted 51,386,299 50,965,884Net income per share, diluted $0.97 $0.87 11Eliminate REITs charge reversing benefit in the first three quarters of the year - 0.16 N/MEliminate other-than-temporary impairment on GSE 0.09 - N/M ----------- -----------Adjusted net income per share, diluted (1) $1.06 $1.03 3 =========== =========== For the twelve months ended December 31, 2004 2003 % Change ----------- ---------- --------Interest income $604,325 $575,725 5Interest expense (58,437) (61,110) (4) ----------- ----------Net interest income 545,888 514,615 6Provision for credit losses - (29,000) (100) ----------- ----------Net interest income after provision for credit losses 545,888 485,615 12Noninterest income 184,265 177,225 4Noninterest expense (395,410) (364,178) 9Minority interest (4,992) (4,039) 24 ----------- ----------Income before taxes 329,751 294,623 12Income taxes (123,429) (107,946) 14 ----------- ----------Net income $206,322 $186,677 11 =========== ==========Net income per share, diluted $4.04 $3.72 9 =========== ==========Dividends paid per share $1.28 $0.97 32 =========== ==========Shares used to compute per share net income, diluted 51,074,008 50,197,722Net income per share, diluted $4.04 $3.72 9Eliminate REITs charge reversing benefit in the first three quarters of the year - - N/MEliminate other-than-temporary impairment on GSE 0.09 - N/M ----------------------Adjusted net income per share, diluted (1) $4.13 $3.72 11 ======================(1) This is presented to aid in evaluation of financial performanceCITY NATIONAL CORPORATION----------------------------------------------------------------------SELECTED FINANCIAL INFORMATION(unaudited)(Dollars in thousands)---------------------------------------------------------------------- For the three months ended December 31, 2004 2003 % Change ----------- ----------- ---------Average BalancesLoans Commercial $3,143,644 $3,129,296 - Commercial real estate mortgage 1,850,250 1,719,375 8 Residential mortgage 2,197,680 1,878,248 17 Real estate construction 826,116 614,300 34 Equity lines of credit 245,513 180,259 36 Installment 93,354 83,939 11 ----------- ----------- Total loans $8,356,557 $7,605,417 10 =========== ===========Securities $4,012,183 $3,278,831 22Due from banks - interest bearing 91,817 145,460 (37)Interest-earning assets 13,039,640 11,749,593 11Assets (1) 14,120,530 12,766,528 11Core deposits 11,074,428 9,737,343 14Deposits 11,938,672 10,693,959 12Shareholders' equity 1,330,614 1,200,390 11Noninterest income Trust and investment fees $19,264 $14,235 35 Brokerage and mutual fund fees 9,909 9,082 9 Cash management and deposit transaction fees 9,024 10,642 (15) International services 5,425 5,144 5 Bank owned life insurance 678 773 (12) Other 5,204 7,557 (31) ----------- ----------- Subtotal - core 49,504 47,433 4 Gain (loss) on sale of loans and assets/debt repurchase - (40) (100) Gain (loss) on sale of securities (7,715) 536 (1,539) ----------- ----------- Total $41,789 $47,929 (13) =========== ===========Total revenue $187,089 $178,542 5 =========== ===========Noninterest expense Salaries and employee benefits $60,926 $55,912 9 ----------- ----------- All Other Net occupancy of premises 10,045 8,435 19 Professional 11,347 7,204 58 Information services 5,170 4,699 10 Depreciation 3,503 3,343 5 Marketing and advertising 4,513 3,499 29 Office services 2,955 2,485 19 Amortization of intangibles 1,798 2,654 (32) Equipment 581 519 12 Other operating 6,625 6,367 4 ----------- ----------- Total all other 46,537 39,205 19 ----------- ----------- Total $107,463 $95,117 13 =========== ===========Selected RatiosFor the Period Return on average assets (1) 1.40 % 1.38 % 1 Return on average shareholders' equity 14.87 14.69 1 Efficiency ratio (2) 56.69 52.77 7 Dividend payout ratio 31.81 30.94 3Period End (1) Tier 1 risk-based capital ratio Total risk-based capital ratio Tier 1 leverage ratio For the twelve months ended December 31, 2004 2003 % Change ----------- ----------- ---------Average BalancesLoans Commercial $3,136,538 $3,319,328 (6) Commercial real estate mortgage 1,827,221 1,727,554 6 Residential mortgage 2,081,066 1,781,006 17 Real estate construction 767,841 647,851 19 Equity lines of credit 216,206 173,937 24 Installment 89,604 79,474 13 ----------- ----------- Total loans $8,118,476 $7,729,150 5 =========== ===========Securities $3,689,024 $2,976,741 24Due from banks - interest bearing 63,042 66,755 (6)Interest-earning assets 12,334,521 11,159,034 11Assets (1) 13,395,995 12,156,145 10Core deposits 10,425,528 9,042,255 15Deposits 11,275,017 10,045,267 12Shareholders' equity 1,262,562 1,147,477 10Noninterest income Trust and investment fees $68,366 $47,113 45 Brokerage and mutual fund fees $37,677 $36,601 3 Cash management and deposit transaction fees 41,386 43,513 (5) International services 20,784 19,336 7 Bank owned life insurance 2,812 2,965 (5) Other 19,119 24,545 (22) ----------- ----------- Subtotal - core 190,144 174,073 9 Gain (loss) on sale of loans and assets/debt repurchase 9 78 (88) Gain (loss) on sale of securities (5,888) 3,074 (292) ----------- ----------- Total $184,265 $177,225 4 =========== ===========Total revenue $730,153 $691,840 6 =========== ===========Noninterest expense Salaries and employee benefits $239,583 $217,494 10 ----------- ----------- All Other Net occupancy of premises 33,126 31,408 5 Professional 31,765 27,230 17 Information services 18,802 18,003 4 Depreciation 13,619 12,796 6 Marketing and advertising 15,498 13,224 17 Office services 10,305 9,957 3 Amortization of intangibles 7,080 9,222 (23) Equipment 2,460 2,351 5 Other operating 23,172 22,493 3 ----------- ----------- Total all other 155,827 146,684 6 ----------- ----------- Total $395,410 $364,178 9 =========== ===========Selected RatiosFor the Period Return on average assets (1) 1.54 % 1.54 % - Return on average shareholders' equity 16.34 16.27 - Efficiency ratio (2) 53.89 52.15 3 Dividend payout ratio 30.50 25.33 20Period End (1) Tier 1 risk-based capital ratio 11.51 10.80 7 Total risk-based capital ratio 15.11 14.85 2 Tier 1 leverage ratio 7.83 7.48 5(1) As of September 30, 2004, the company reclassified the reserve for unfunded credit commitments from the allowance for loan losses to other liabilities. Amounts presented prior to the third quarter of 2004 have been reclassified to conform with the presentation in the current reporting period.(2) 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 CORPORATION----------------------------------------------------------------------SELECTED FINANCIAL INFORMATION(unaudited)(Dollars in thousands)----------------------------------------------------------------------Period end December 31, September 30, 2004 2003 % Change 2004 ------------- ------------ --------- -------------Loans Commercial $3,158,369 $3,222,444 (2) $3,020,235 Commercial real estate mortgage 1,892,823 1,813,519 4 1,852,472 Residential mortgage 2,248,742 1,937,979 16 2,167,623 Real estate construction 847,364 637,595 33 797,109 Equity lines of credit 255,194 188,710 35 242,050 Installment 91,695 82,495 11 94,648 ------------- ------------ -------------- Total loans $8,494,187 $7,882,742 8 $8,174,137 ============= ============ ==============Deposits Noninterest- bearing $6,026,428 $5,486,668 10 $5,922,689 Interest- bearing, core 5,027,638 4,510,194 11 5,083,550 ------------ ------------ -------------- Total core deposits 11,054,066 9,996,862 11 11,006,239 Time deposits - $100,000 and over 932,849 940,201 (1) 859,314 ------------ ------------ -------------- Total deposits $11,986,915 $10,937,063 10 $11,865,553 ============ ============ ============== For the three For the twelve months ended months ended December 31, December 31, 2004 2003 % Change 2004 2003 % Change -------- ----- --------- -------- ----- ---------Yields and Rates for the Period Loans 5.68% 5.51% 3 5.52% 5.75% (4) Securities 4.35 4.55 (4) 4.40 4.72 (7) Interest-earning assets 5.08 4.95 3 5.01 5.29 (5) Interest-bearing deposits 0.87 0.69 26 0.76 0.86 (12) Other borrowings 2.77 1.86 49 2.23 2.13 5 Total interest bearing liabilities 1.05 0.80 31 0.90 0.99 (9) Net interest margin 4.54 4.52 0 4.54 4.74 (4) December 31, September 30, 2004 2003 % Change 2004 -------- -------- --------- -------------Credit Quality Nonaccrual loans and ORE Nonaccrual loans $34,638 $42,273 (18) $35,269 ORE - - - - -------- -------- ------------- Total nonaccrual loans and ORE $34,638 $42,273 (18) $35,269 ======== ======== ============= Total nonaccrual loans and ORE to total loans and ORE 0.41 0.54 (24) 0.43 Loans past due 90 days or more on accrual status $142 $2,043 (93) $3,586 ======== ======== ============= For the three For the twelve months ended months ended December 31, December 31, 2004 2003 % Change 2004 2003 % Change -------- --------- --------- --------- --------- --------Allowance for Loan LossesBeginning balance $148,056 $156,563 (5) $156,015 $156,598 - Provision for credit losses (2) 544 (325) (267) (1,780) 26,933 (107) Charge-offs (6,339) (3,330) 90 (28,525) (40,022) (29) Recoveries 6,307 3,107 103 22,858 12,506 83 --------- --------- --------- --------- Net charge- offs (32) (223) (86) (5,667) (27,516) (79) --------- --------- --------- ---------Ending Balance $148,568 $156,015 (5) $148,568 $156,015 (5) ========= ========= ========= =========Reserve for Off-Balance Sheet Credit CommitmentsBeginning balance $12,295 $9,646 27 $9,971 $7,904 26 Provision (544) 325 (267) 1,780 2,067 (14) --------- --------- --------- ---------Ending Balance $11,751 $9,971 18 $11,751 $9,971 18 ========= ========= ========= =========Total net charge-offs to average loans (annualized) 0.00 (0.01) (100) (0.07) (0.36) (81)Allowance for loan losses to total loans 1.75 1.98 (12)Allowance for loan losses to nonaccrual loans 428.92 369.07 16Allowance for credit losses to nonaccrual loans (1) 462.84 392.65 18As of September 30, 2004, the company reclassified the reserve forunfunded credit commitments from the allowance for loan losses toother liabilities. Amounts presented prior to the third quarter of2004 have been reclassified to conform to the presentation in thecurrent reporting period.(1) Allowance for credit losses equals allowance for loan losses and reserves off-balance sheet credit commitments.(2) Including reclass from/(to) reserve for unfunded credit commitments.
 CONTACT: City National Corporation Christopher J. Carey, 310-888-6777 (Financial/Investors) Cary Walker, 213-833-4715 (Media) or Conference Call Today 2:00 p.m. PST 866-800-8652 Pass code 16742230 SOURCE: City National Corporation