Second-Quarter Net Income Increases 16 Percent On A Comparable Basis

LOS ANGELES, Jul 16, 2002 (BUSINESS WIRE) - City National Corporation (NYSE:CYN), parent company of wholly owned City National Bank, today reported recordnet income of $45.8 million for the second quarter of 2002, compared withreported net income of $36.3 million for the second quarter of 2001 and $44.2million for the first quarter of 2002. Net income per diluted common share was$0.88, compared with $0.74 reported for the second quarter of 2001 and $0.87 forthe first quarter of 2002. Results for 2002 include the operations of CivicBanCorp ("Civic") from February 28, 2002, the date that the acquisition wascompleted, and the new accounting standards for goodwill ("New GAAP").

For the first half of 2002, City National Corporation achieved record net incomeof $90.0 million, compared with reported net income of $69.9 million for thefirst half of 2001. For the first half of 2002, net income per diluted commonshare was $1.75, compared with $1.43 per share reported in the first half of2001.

The company's second-quarter 2002 net income of $45.8 million was up 16 percentfrom $39.6 million a year earlier, this latter amount having been adjusted toexclude the amortization of goodwill from the prior reported period to reflectNew GAAP. As a result, net income per diluted common share of $0.88 rose 10percent from $0.80 in the second quarter a year ago on a comparable basis.

Net income for the first half of 2002 of $90.0 million was up 18 percent from$76.4 million for the first half of 2001, the latter amount adjusted to reflectNew GAAP. Accordingly, net income per diluted common share was $1.75, anincrease of 12 percent from $1.56 in the first half of 2001 on a comparablebasis.

Cash net income, which in 2002 excludes only the amortization of core depositintangibles, was $47.0 million, or $0.90 per diluted common share in the secondquarter of 2002, compared with $40.3 million, or $0.82 per share, in the secondquarter of 2001, and $45.1 million, or $0.89 per share in the first quarter of2002. For the first half of 2002, cash net income was $92.1 million, or $1.79per diluted common share, compared with $77.8 million, or $1.59 per share forthe first half of 2001.

"City National continued to report record quarterly net income growth backed bysolid increases in our loan portfolio and particularly strong growth indeposits," said Chief Executive Officer Russell Goldsmith. "In addition tocompleting the integration of Civic BanCorp and expanding our presence in theSan Francisco Bay Area to about 10 percent of our assets in this quarter, wecontinued to attract new clients, control costs and build City National'scapabilities as California's premier private and business bank."

"We were able to post record results even while taking the prudent step ofincreasing our provision for credit losses, primarily to further reduce ourdeclining exposure to syndicated media and telecommunication loans," Goldsmithadded.

Return on Assets/Return on Equity

The company's return on average assets for the second quarter of 2002 was 1.68percent, compared with, on an adjusted basis, 1.74 percent for the secondquarter of 2001 and 1.73 percent for the first quarter of 2002. The return onaverage shareholders' equity was 17.53 percent, compared with, on an adjustedbasis, 19.90 percent for the prior-year second quarter and 18.97 percent for thefirst quarter of 2002. For the first half of 2002, the return on average assetswas 1.71 percent, and the return on average shareholders' equity was 18.21percent compared with, on an adjusted basis, 1.71 percent and 19.71 percent forthe first half of 2001. The adjustment makes the 2001 data comparable with NewGAAP. The lower return on average shareholders' equity in the current periodcompared with a year ago is due primarily to a higher level of shareholders'equity from increased unrealized securities gains, retained net income, theshares issued for the Civic acquisition and from the exercise of stock options.

On a cash basis (which in 2002 excludes only the after-tax impact ofnonqualifying core deposit intangibles from average assets and averageshareholders' equity), the return on average assets was 1.76 percent and thereturn on average shareholders' equity was 23.05 percent for the second quarterof 2002, compared with 1.81 percent and 26.40 percent, respectively, for thesecond quarter of 2001 and 1.80 percent and 23.60 percent, respectively, for thefirst quarter of 2002. For the first half of 2002, the return on average assetswas 1.78 percent and the return on average shareholders' equity was 23.23percent, compared with 1.78 percent and 26.19 percent for the first half of2001.

Assets

Total average assets reached $10.9 billion for the second quarter of 2002, anincrease of 20 percent over $9.1 billion for the second quarter of 2001 and 6percent over the $10.3 billion in average assets for the first quarter of 2002.Total assets at June 30, 2002 were $11.0 billion, compared with $9.1 billion atJune 30, 2001 and $11.2 billion at March 31, 2002.

Total average interest-earning assets were $10.1 billion for the second quarterof 2002, an increase of 21 percent over the $8.3 billion in averageinterest-earning assets for the second quarter of 2001 and 6 percent over the$9.5 billion in average interest-earning assets for the first quarter of 2002.

Loans

Average loans for the second quarter of 2002 rose to $7.9 billion, an increaseof 21 percent over the second quarter of 2001, reflecting the acquisition ofCivic and continuing solid internally generated loan growth, albeit at a ratesomewhat less than achieved in the first quarter of 2002. Compared with theprior-year quarter, commercial loans rose 20 percent to $3.7 billion from $3.1billion. Residential first mortgage loans rose 28 percent to $1.7 billion from$1.3 billion. Real estate mortgage loans rose 12 percent to $1.8 billion from$1.6 billion and real estate construction loans rose 39 percent to $0.6 billionfrom $0.4 billion. Average loans increased 6 percent from the first quarter of2002.

Average loans for the first half of 2002 increased 18 percent to $7.7 billionfrom $6.5 billion for the same period last year. Commercial loans rose 14percent to $3.6 billion from $3.1 billion. Residential first mortgage loans rose27 percent to $1.7 billion from $1.3 billion. Real estate mortgage loans rose 13percent to $1.8 billion from $1.6 billion and real estate construction loansrose 35 percent to $0.6 billion from $0.5 billion.

Total loans at June 30, 2002 reached $7.9 billion, compared with $6.6 billion atJune 30, 2001, and $7.8 billion at March 31, 2002, increases of 20 percent and 1percent, respectively. During the quarter, the company decided to reduce itsmedia and telecommunication exposure and identified for sale seven syndicatedloans with individual commitment levels above $7.5 million. These loans totaledapproximately $60.0 million in outstanding balances and were transferred toassets available-for-sale. As of June 30, 2002, following the transfer of theseloans to available-for-sale, the company's media and telecommunication portfoliocontains 23 loans with commitment and outstanding balances of $138.3 million and$94.8 million, respectively, or just slightly more than 1 percent of the loanportfolio. All but one of these loans are syndicated.

Syndicated non-relationship loans were $47.5 million, less than 1 percent of theloan portfolio, at June 30, 2002, compared with $110.5 million at June 30, 2001and $62.2 million at March 31, 2002. Five media and telecommunication loans withcommitment and outstanding balances of $22.3 million and $12.9 million,respectively, as of June 30, 2002 are included among these non-relationshiploans and in the total media and telecommunication loan portfolio discussedabove.

Management continues to expect that average loan growth for 2002 will be in therange of 11 percent to 15 percent.

Deposits

Average deposits during the second quarter of 2002 were $8.6 billion, anincrease of 23 percent over the second quarter of 2001 and 8 percent over thefirst quarter of 2002. During the first half of 2002, average deposits increased20 percent to $8.2 billion, compared with $6.9 billion for the first half of2001.

During the second quarter of 2002, average core deposits, which provide a stablesource of low-cost funding, rose $1.7 billion to $7.2 billion, an increase of 31percent over the $5.5 billion in the second quarter of 2001 and 10 percenthigher than the $6.6 billion for the first quarter of 2002. Average coredeposits represented 85 percent of the total average deposit base for the secondquarter, up from 79 percent for the prior-year quarter and up from 83 percentfor the first quarter of 2002. For the first half of 2002, average core depositswere $6.9 billion, up 30 percent from $5.3 billion for the first half of 2001.New clients, the acquisition of Civic, and a lower earnings credit on analyzeddeposit accounts resulting from lower interest rates, contributed to the growthof deposits.

Deposits totaled $8.8 billion at June 30, 2002, compared with $7.1 billion atJune 30, 2001 and $8.7 billion at March 31, 2002, increases of 24 percent and 2percent, respectively.

Management has revised its forecast and currently expects average year-over-yeardeposit growth to be in the range of 14 percent to 16 percent for 2002.

Net Interest Income

Fully taxable-equivalent net interest income for the second quarter of 2002 was$134.3 million, an increase of 24 percent over $108.4 million for the secondquarter of 2001. Second-quarter net interest income was 7 percent higher thanthe $125.4 million recorded for the first quarter of 2002. Fullytaxable-equivalent net interest income for the first half of 2002 was $259.7million, an increase of 20 percent over $216.5 million for the first half of2001. Interest income recovered on nonaccrual and charged-off loans includedabove was $0.6 million for the second quarter of 2002, compared with $0.6million for the second quarter of 2001 and $0.4 million for the first quarter of2002.

As part of the company's asset liability management strategy, its "plainvanilla" interest rate swaps hedging loans, deposits and borrowings added $8.5million to net interest income in the second quarter of 2002 compared with $3.1million in the second quarter of 2001 and $7.9 million for the first quarter of2002. This included $3.7 million, $1.5 million and $3.2 million for the secondquarter of 2002 and 2001 and the first quarter of 2002, respectively, forinterest rate swaps qualifying as fair value hedges. For the first half of 2002,interest rate swaps added $16.4 million to net interest income, compared with$4.1 million for the first half of 2001. These amounts include $6.9 million and$2.4 million, respectively, for interest swaps qualifying as fair value hedges.

The fully taxable-equivalent net interest margin for the second quarter of 2002was 5.35 percent, compared with 5.23 percent for the second quarter of 2001 and5.34 percent for the first quarter of 2002. The net interest margin for thefirst half of 2002 was 5.35 percent compared with 5.32 percent for the firsthalf of 2001. The increases over the same periods last year are primarily due tothis year's more stable interest rate environment. The Bank's prime rate was4.75 percent as of June 30, 2002, compared with 6.75 percent a year earlier and4.75 percent at March 31, 2002.

Management has revised its forecast and currently expects the net interestmargin for 2002 will be slightly higher than the net interest margin of 5.26percent reported for 2001.

Noninterest Income

Core noninterest income increased 18 percent to $37.2 million for the secondquarter of 2002, compared with $31.5 million for the second quarter of 2001, and11 percent over the $33.6 million for the first quarter of 2002. For the firsthalf of 2002, core noninterest income increased 16 percent to $70.8 millioncompared with $61.0 million for the first half of 2001.

Assets under administration at June 30, 2002 totaled $18.3 billion, including$6.9 billion under management, down slightly compared with $18.5 billion and$7.2 billion, respectively, at June 30, 2001, and $18.8 billion and $7.3billion, respectively, at March 31, 2002. The quarter-over-quarter decrease inassets under management was attributable largely to a decline in money-marketfund balances as some clients rebalanced asset allocations of portfolios,extended maturities from money-market accounts to achieve higher yields, ormaintained funds as bank deposits to pay for services. Trust and investment feerevenues for the second quarter and first half of 2002 were higher compared withthe prior-year periods, primarily due to transaction volume.

Cash management and deposit transaction fees for the second quarter and firsthalf of 2002 increased over the same periods last year as the result of stronggrowth in deposits, including those added by the Civic acquisition, higher salesof online cash management products, and reductions in the earnings credit onanalyzed deposit accounts resulting from lower interest rates. Cash managementand deposit transaction fees for the second quarter of 2002 were slightly lowerthan the first quarter due to the absence of prior-year annual fees recognizedin the first quarter.

Increases in international services and other income were partially attributableto additional entertainment and middle-market commercial international businessand higher participating mortgage loan income.

Gains on the sale of assets and the repurchase for debt and gains on the sale ofsecurities for the second quarter of 2002 were $1.5 million. The total for thesame period last year was $1.4 million, which included a $0.9 million gain onrepurchase of debt. The first quarter of 2002 included $2.4 million in gains.During the second quarter of 2002, a $1.2 million gain was realized from thesale of a bank property. For the first half of 2002, $3.9 million in gains,including a $2.0 million gain on the sale of ORE during the first quarter, wererealized compared with $3.2 million in gains for the first half of 2001.

Noninterest income for both the second quarter and first half of 2002 was 23percent of total revenues, compared with 24 percent and 23 percent,respectively, for the second quarter and first half of 2001.

Management continues to expect growth in noninterest income to range from 7percent to 10 percent for 2002. Last year, the acquisition of Reed, Conner &Birdwell accounted for approximately one-quarter of the 21 percent increase innoninterest income reported for the year. In addition, management expects that amore stable interest rate environment will contribute to a reduction in thegrowth rate of cash management and deposit transaction fees for the remainder of2002.

Noninterest Expense

After excluding amortization of goodwill from prior year reported periods,noninterest expense of $83.0 million for the second quarter of 2002 was up 9percent from $75.8 million for the second quarter of 2001 and 5 percent from$78.8 million for the first quarter of 2002. The increases were primarily theresult of the company's growth, including the acquisition of Civic, and costsassociated with additional colleagues. Noninterest expense for the first half of2002 increased 8 percent to $161.7 million compared with $149.2 million for thefirst half of 2001 on a comparable basis.

The company's cash efficiency ratio for the second quarter of 2002 improved to46.76 percent from 52.60 percent for the second quarter of 2001 and 47.95percent for the first quarter of 2002. The improvement over the prior year wasdriven by both increased revenues and the company's ongoing efforts to improveefficiency and productivity. For the first half of 2002, the cash efficiencyratio was 47.34 percent compared with 52.31 percent for the first half of 2001.

Excluding the amortization of goodwill in 2001, management continues toanticipate that 2002 noninterest expense will increase 7 percent to 10 percentover the prior year, with the acquisition of Civic accounting for a significantamount of the increase.

Income Taxes

The effective tax rate for the second quarter was 33.1 percent and 33.9 percentfor the first half of 2002, compared with, as reported, 30.7 percent for thesecond quarter and 33.1 percent for the first half of 2001. The effective taxrate for the first quarter of 2002 was 34.8 percent. The higher effective taxrates in 2002 are partially due to the elimination of the tax benefitprecipitated by the completion of the de-registration of the company'sregistered investment company, offset by the realization of a capital lossresulting from the issuance and subsequent sale of an additional series ofpreferred stock by the company's real estate investment trust subsidiary.Management continues to anticipate the company's effective tax rate for 2002will fall within a range of 32 percent to 34 percent.

Credit Quality

Net loan charge-offs were $16.0 million and $7.3 million for the second quartersof 2002 and 2001, respectively, and $7.0 million for the first quarter of 2002.For the first six months of 2002 and 2001, net loan charge-offs were $23.0million and $15.6 million, respectively. As an annualized percentage of averageloans, net charge-offs were 0.81 percent, 0.45 percent and 0.38 percent for thesecond quarters of 2002 and 2001 and the first quarter of 2002, respectively.Second-quarter loan charge-offs reflected $9.7 million for nine media andtelecommunication syndicated loans, including the impact of the loanstransferred to available-for-sale.

Total nonperforming assets (nonaccrual loans and ORE) were $64.9 million, or0.83 percent of total loans and ORE, at June 30, 2002, compared with $38.3million, or 0.58 percent, at June 30, 2001 and $50.6 million, or 0.65 percent,at March 31, 2002 and do not contain any concentration of credits within aspecific industry sector. Of the $14.3 million increase from March 31, 2002,$12.7 million related to 5 loans which are either fully collateralized or havebeen written down to their current estimated recoverable values. Threesyndicated non-relationship loans on nonaccrual status totaled $6.4 million atJune 30, 2002 and $6.5 million at March 31, 2002.

The company recorded a provision for credit losses of $18.0 million and $29.0million for the second quarter and first half of 2002, respectively, comparedwith $6.5 million and $14.0 million for the same periods in 2001. The provisionfor credit losses in the first quarter of 2002 was $11.0 million. The provisionfor credit losses this quarter primarily reflects the levels of net loancharge-offs and nonaccrual loans. Additional factors affecting the provisioninclude management's ongoing assessment of the credit quality of the portfolioas well as its growth and the economic environment during this period.

The allowance for credit losses at June 30, 2002 totaled $157.6 million, or 2.01percent of outstanding loans. This compares with an allowance of $133.9 million,or 2.04 percent at June 30, 2001 and an allowance of $155.7 million, or 2.01percent at March 31, 2002. The allowance for credit losses as a percentage ofnonaccrual loans was 245 percent at June 30, 2002, compared with 361 percent atJune 30, 2001 and 310 percent at March 31, 2002. Management believes theallowance for credit losses is adequate to cover risks in the portfolio,including any unfunded commitments at June 30, 2002.

The provision for credit losses to be taken in 2002 will reflect management'sassessment of the above factors, as well as changes in the economic environmentduring this period. Based on its current assessment, management anticipates thata provision for credit losses for all of 2002, including the amount required byits decision to reduce its media and telecommunication exposure could fallwithin the $40.0 million to $55.0 million range.

Outlook

Management continues to believe net income per diluted common share for 2002will be approximately 8 percent to 11 percent higher than adjusted net incomeper diluted common share for 2001.

Capital Levels

Total risk-based capital and Tier 1 risk-based capital ratios at June 30, 2002were 14.24 percent and 9.74 percent, compared with the minimum"well-capitalized" capital ratios of 10 percent and 6 percent, respectively. Thecompany's Tier 1 leverage ratio of 7.44 percent exceeded the regulatory minimumof 4 percent required for a "well-capitalized" institution. Total risk-basedcapital, Tier 1 risk-based capital and the Tier 1 leverage ratios at March 31,2002 were 13.55 percent, 9.05 percent and 7.31 percent, respectively. The totalrisk-based capital ratio benefited from the issuance of $2.8 million of Series Bpreferred stock in the second quarter by a subsidiary of the bank. The stockqualifies as Tier 1 capital.

Stock Repurchase

Under the October 26, 2000 stock buyback program of 1 million shares, 348,700shares have been repurchased at an average price of $34.10 per share. There wereno shares repurchased during the second quarter of 2002. The shares purchasedunder the buyback program have been reissued for acquisitions, upon the exerciseof stock options, and for other general corporate purposes. There were notreasury shares at June 30, 2002.

About City National

City National Corporation (NYSE: CYN) is a financial services company with $11billion in total assets. Its wholly owned subsidiary, City National Bank, is thesecond largest independent bank headquartered in California. As California'sPremier Private and Business Bank(SM), City National provides banking,investment and trust services through 54 offices in 12 California counties. Thecompany has approximately $18 billion in investment and trust assets undermanagement or administration.

This news release contains forward-looking statements about the company forwhich the company claims the protection of the safe harbor provisions containedin the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are based on management's knowledge and belief as oftoday and include information concerning the company's possible or assumedfuture financial condition, and its results of operations, business and earningsoutlook. These forward-looking statements are subject to risks anduncertainties. A number of factors, some of which are beyond the company'sability to control or predict, could cause future results to differ materiallyfrom those contemplated by such forward-looking statements. These factorsinclude (1) economic uncertainty created by unrest in other parts of the world,(2) economic uncertainty created by the military, diplomatic and humanitarianactions of the United States and allied nations in Afghanistan in response toterrorists acts on the United States, (3) the prospect of additional terroristacts within the United States and the uncertain effect of these events on ournational and regional economies, (4) changes in interest rates, (5) significantchanges in banking laws or regulations, (6) increased competition in thecompany's market, (7) higher-than-expected credit losses, (8) the effect ofacquisitions and integration of acquired businesses, and (9) unanticipatedchanges in regulatory, judicial, or legislative tax treatment of businesstransactions. Management cannot predict at this time the severity or duration ofthe effects of the recent business slowdown on our specific business activitiesand profitability. Decreased capital and consumer spending, and relatedrecessionary trends could adversely affect our performance in a number of waysincluding decreased demand for our products and services and increased creditlosses. Forward-looking statements speak only as of the date they are made, andthe company does not undertake to update forward-looking statements to reflectcircumstances or events that occur after the date the statements are made, or toupdate earnings guidance including the factors that influence earnings.

For a more complete discussion of these risks and uncertainties, see thecompany's Quarterly Report on Form 10-Q for the quarter-ended March 31, 2002,and particularly the section of Management's Discussion and Analysis thereintitled "Cautionary Statement for Purposes of the 'Safe Harbor' Provisions of thePrivate Securities Litigation Reform Act of 1995."

 CITY NATIONAL CORPORATION CONSOLIDATED BALANCE SHEET (unaudited) (Dollars in thousands, except per share amount) June 30, 2002 2001 % ChangeAssetsCash and due from banks $ 442,343 $ 441,665 --Federal funds sold 165,000 10,000 N/MSecurities 1,988,817 1,681,233 18Loans (net of allowance for credit losses of $157,647 and $133,883) 7,696,883 6,433,487 20Other assets 689,377 557,208 24Total assets $10,982,420 $ 9,123,593 20Liabilities and Shareholders' EquityNoninterest-bearing deposits $ 3,973,435 $ 3,134,792 27Interest-bearing deposits 4,823,732 3,945,842 22Total deposits 8,797,167 7,080,634 24Federal funds purchased and securities sold under repurchase agreements 110,665 261,849 (58)Other short-term borrowed funds 421,125 653,125 (36)Subordinated debt 282,043 118,939 137Other long-term debt 169,144 94,255 79Other liabilities 128,938 98,951 30Total liabilities 9,909,082 8,307,753 19Shareholders' equity 1,073,338 815,840 32Total liabilities and shareholders' equity $10,982,420 $ 9,123,593 20Book value per share $ 21.41 $ 17.04 26Number of shares at period end 50,122,921 47,888,923 5 CONSOLIDATED STATEMENT OF INCOME (unaudited) (Dollars in thousands, except per share amount) For the three months ended June 30, 2002 2001 % ChangeInterest income $ 155,511 $ 156,490 (1)Interest expense (24,937) (51,441) (52)Net interest income 130,574 105,049 24Provision for credit losses (18,000) (6,500) 177Net interest income after provision for credit losses 112,574 98,549 14Noninterest income 38,738 32,894 18Noninterest expense (82,959) (79,012) 5Income before taxes 68,353 52,431 30Income taxes (22,593) (16,087) 40Net income 45,760 36,344 26Amortization of goodwill - 3,220 (100)Net income - new GAAP $ 45,760 $ 39,564 16Net income - new GAAP per share, diluted $ 0.88 $ 0.80 10Net income per share, basic $ 0.92 $ 0.76 21Net income per share, diluted $ 0.88 $ 0.74 19Dividends paid per share $ 0.20 $ 0.19 5Cash net income $ 46,952 $ 40,300 17Cash net income per share, basic $ 0.94 $ 0.84 12Cash net income per share, diluted $ 0.90 $ 0.82 10Shares used to compute per share net income, basic 49,963,388 47,768,235Shares used to compute per share net income, diluted 52,082,511 49,218,635 For the six months ended June 30, 2002 2001 % ChangeInterest income $ 303,869 $ 320,682 (5)Interest expense (51,600) (110,716) (53)Net interest income 252,269 209,966 20Provision for credit losses (29,000) (14,000) 107Net interest income after provision for credit losses 223,269 195,966 14Noninterest income 74,681 64,155 16Noninterest expense (161,732) (155,616) 4Income before taxes 136,218 104,505 30Income taxes (46,222) (34,570) 34Net income 89,996 69,935 29Amortization of goodwill - 6,427 (100)Net income - new GAAP $ 89,996 $ 76,362 18Net income - new GAAP per share, diluted $ 1.75 $ 1.56 12Net income per share, basic $ 1.82 $ 1.47 24Net income per share, diluted $ 1.75 $ 1.43 22Dividends paid per share $ 0.39 $ 0.37 5Cash net income $ 92,067 $ 77,832 18Cash net income per share, basic $ 1.87 $ 1.63 15Cash net income per share, diluted $ 1.79 $ 1.59 13Shares used to compute per share net income, basic 49,326,706 47,725,720Shares used to compute per share net income, diluted 51,442,779 49,026,705 CITY NATIONAL CORPORATION SELECTED FINANCIAL INFORMATION (unaudited) (Dollars in thousands)Period end June 30, 2002 2001 % ChangeLoansCommercial $ 3,552,800 $ 3,013,343 18Residential first mortgage 1,730,589 1,407,621 23Real estate mortgage 1,866,086 1,582,691 18Real estate construction 635,218 490,146 30Installment 69,837 73,569 (5)Total loans $ 7,854,530 $ 6,567,370 20DepositsNoninterest-bearing $ 3,973,435 $ 3,134,792 27Interest-bearing, core 3,530,798 2,587,181 36Total core deposits 7,504,233 5,721,973 31Time deposits - $100,000 and over 1,292,934 1,358,661 (5)Total deposits $ 8,797,167 $ 7,080,634 24Credit QualityNonaccrual loans and ORENonaccrual loans $ 64,432 $ 37,085 74ORE 460 1,212 (62)Total nonaccrual loans and ORE $ 64,892 $ 38,297 69Total nonaccrual loans and ORE to total loans and ORE 0.83 0.58 43Loans past due 90 days or more on accrual status $ 3,257 $ 13,107 (75)Restructured loans on accrual status $ - $ 1,463 (100) For the three months ended June 30,Allowance for Credit Losses 2002 2001 % ChangeBeginning balance $ 155,657 $ 134,727 16Additions from acquisition - -- --Provision for credit losses 18,000 6,500 177Charge-offs (17,861) (10,838) 65Recoveries 1,851 3,494 (47)Net charge-offs (16,010) (7,344) 118Ending Balance $ 157,647 $ 133,883 18Total net charge-offs to average loans (annualized) (0.81) (0.45) 80Allowance for credit losses to total loansAllowance for credit losses to nonaccrual loans For the six months ended June 30,Allowance for Credit Losses 2002 2001 % ChangeBeginning balance $ 142,862 $ 135,435 5Additions from acquisition 8,787 - N/MProvision for credit losses 29,000 14,000 107Charge-offs (27,157) (22,922) 18Recoveries 4,155 7,370 (44)Net charge-offs (23,002) (15,552) 48Ending Balance $ 157,647 $ 133,883 18Total net charge-offs to average loans (annualized) (0.60) (0.48) 25Allowance for credit losses to total loans 2.01 2.04 (1)Allowance for credit losses to nonaccrual loans 244.67 361.02 (32) CITY NATIONAL CORPORATION SELECTED FINANCIAL INFORMATION (unaudited) (Dollars in thousands) For the three months ended June 30,Average Balances 2002 2001 % ChangeLoansCommercial $ 3,687,873 $ 3,082,786 20Residential first mortgage 1,718,680 1,338,909 28Real estate mortgage 1,791,314 1,594,040 12Real estate construction 622,223 446,949 39Installment 68,915 74,691 (8)Total loans $ 7,889,005 $ 6,537,375 21Securities $ 2,029,742 $ 1,690,786 20Interest-earning assets 10,068,002 8,308,244 21Assets 10,934,265 9,132,024 20Core deposits 7,238,807 5,510,106 31Deposits 8,551,230 6,975,066 23Shareholders' equity 1,047,042 797,398 31Noninterest incomeTrust and investment fee revenue $ 15,736 $ 14,779 6Cash management and deposit transaction fees 10,025 7,583 32International services 4,719 3,840 23Bank owned life insurance 719 697 3Other 6,035 4,565 32Subtotal - core 37,234 31,464 18Gain on sale of loans and assets/debt repurchase 1,320 891 48Gain on sale of securities 184 539 (66)Total $ 38,738 $ 32,894 18Noninterest expenseSalaries and employee benefits $ 49,642 $ 42,711 16All OtherNet occupancy of premises 6,495 6,628 (2)Professional 5,182 6,358 (18)Information services 4,661 4,088 14Depreciation 3,336 3,413 (2)Marketing and advertising 3,311 3,316 --Office services 2,731 2,424 13Amortization of core deposit intangibles 2,056 1,405 46Amortization of goodwill - 3,220 (100)Acquisition integration - -- --Equipment 789 603 31Other operating 4,756 4,846 (2)Total all other 33,317 36,301 (8)Total 82,959 79,012 5Less amortization of goodwill - (3,220) (100)Adjusted total $ 82,959 $ 75,792 9Selected RatiosFor the PeriodReturn on average assets - new GAAP 1.68 % 1.74 % (3)Return on average shareholders' equity - new GAAP 17.53 19.90 (12)Return on average assets 1.68 1.60 5Return on average shareholders' equity 17.53 18.28 (4)Net interest margin 5.35 5.23 2Efficiency ratio - new GAAP 47.95 53.59 (11)Efficiency ratio 47.95 55.87 (14)Dividend payout ratio 21.34 24.39 (13)Cash return on average assets 1.76 1.81 (3)Cash return on average shareholders' equity 23.05 26.40 (13)Cash efficiency ratio 46.76 52.60 (11)Period EndTier 1 risk-based capital ratioTotal risk-based capital ratioTier 1 leverage ratio For the six months ended June 30,Average Balances 2002 2001 % ChangeLoansCommercial $ 3,560,880 $ 3,124,734 14Residential first mortgage 1,676,088 1,315,175 27Real estate mortgage 1,754,779 1,557,778 13Real estate construction 616,582 457,939 35Installment 70,059 73,961 (5)Total loans $ 7,678,388 $ 6,529,587 18Securities $ 1,977,433 $ 1,624,282 22Interest-earning assets 9,795,351 8,212,922 19Assets 10,640,826 9,026,738 18Core deposits 6,921,521 5,322,092 30Deposits 8,244,062 6,881,386 20Shareholders' equity 996,690 781,146 28Noninterest incomeTrust and investment fee revenue $ 30,010 $ 28,452 5Cash management and deposit transaction fees 20,394 14,131 44International services 8,510 7,399 15Bank owned life insurance 1,392 1,421 (2)Other 10,504 9,588 10Subtotal - core 70,810 60,991 16Gain on sale of loans and assets/debt repurchase 2,999 1,648 82Gain on sale of securities 872 1,516 (42)Total $ 74,681 $ 64,155 16Noninterest expenseSalaries and employee benefits $ 97,112 $ 85,485 14All OtherNet occupancy of premises 12,675 12,972 (2)Professional 10,411 12,122 (14)Information services 9,021 7,917 14Depreciation 6,728 6,750 --Marketing and advertising 6,099 5,897 3Office services 4,829 4,634 4Amortization of core deposit intangibles 3,571 2,809 27Amortization of goodwill - 6,427 (100)Acquisition integration 1,300 - N/MEquipment 1,271 1,099 16Other operating 8,715 9,504 (8)Total all other 64,620 70,131 (8)Total 161,732 155,616 4Less amortization of goodwill - (6,427) (100)Adjusted total $ 161,732 $ 149,189 8Selected RatiosFor the PeriodReturn on average assets - new GAAP 1.71 % 1.71 % --Return on average shareholders' equity - new GAAP 18.21 19.71 (8)Return on average assets 1.71 1.56 10Return on average shareholders' equity 18.21 18.05 1Net interest margin 5.35 5.32 1Efficiency ratio - new GAAP 47.95 53.31 (10)Efficiency ratio 48.40 55.60 (13)Dividend payout ratio 21.30 25.28 (16)Cash return on average assets 1.78 1.78 --Cash return on average shareholders' equity 23.23 26.19 (11)Cash efficiency ratio 47.34 52.31 (10)Period EndTier 1 risk-based capital ratio 9.74 8.76 11Total risk-based capital ratio 14.24 11.64 22Tier 1 leverage ratio 7.44 6.97 7

City National Corporation

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