City National Corp. Reports Record Earnings for 2005; Net Income Reached $235 Million, or $4.60 Per Share; EPS Grew 14 Percent Year Over Year; Board Increases Annual Dividend 14 Percent to $1.64 Per Share

Business Wire, Jan 19, 2006

LOS ANGELES -- Announcing its 10th straight year of record earnings, City National Corporation (NYSE: CYN), the parent company of wholly owned City National Bank, today reported 2005 net income of $235 million, or $4.60 per share. Net income and earnings per share both grew 14 percent from 2004.

City National also announced that its Board of Directors has increased the company's annual common stock cash dividend to $1.64 per share, up 14 percent from the $1.44 per share previously paid. A dividend of $0.41 per share will be payable on February 15, 2006, to stockholders of record on February 1, 2006.

This is the 12th consecutive year in which City National Corporation has increased its dividend.

2005 FINANCIAL HIGHLIGHTS

--Revenue increased 12 percent from 2004.

--Average loan balances grew 9 percent to $8.9 billion.

--Average deposits totaled $11.8 billion, up 4 percent from 2004.

--City National's net interest margin averaged 4.79 percent in 2005, increasing from 4.54 percent the previous year.

--Credit quality continued to improve. Nonaccrual loans fell 58 percent year over year to 0.16 percent of the total loan portfolio. The company required no provision for credit losses, remaining adequately reserved at 1.66 percent of total loans.

"Strong loan growth, sound asset quality, an exceptional deposit base and an expanding net interest margin and wealth management business contributed to another record performance in 2005," said Chief Executive Officer Russell Goldsmith. "Reflecting the effectiveness of our 2,500 colleagues and the loyalty of our growing client base, for the first time in its 52-year history, City National finished the year with $9.3 billion in loans, $12.1 billion in deposits and more than $39 billion in client investment assets under management or administration.

"At the same time, we continued to invest in the talent, resources, facilities, capabilities and risk management infrastructure that enable City National to continue to improve its performance and potential as California's Premier Private and Business Bank(R)."

For the 12 months
                                                  ended
Dollars in millions,                          December 31,        %
                                          ---------------------
except per share                            2005       2004     Change
----------------------------------------- ---------- ---------- ------
Earnings Per Share                           $4.60      $4.04      14
Net Income                                   234.7      206.3      14
Average Assets                            14,161.3   13,396.0       6
Return on Average Assets                      1.66%      1.54%      8
Return on Average Equity                     16.89      16.34       3

ASSETS

Total assets at December 31, 2005 reached $14.6 billion, up 2 percent from the end of 2004 and 1 percent from the third quarter of 2005.

REVENUES

Revenues (net interest income plus noninterest income) grew to $821 million, a 12 percent increase over 2004.

NET INTEREST INCOME

Fully taxable-equivalent net interest income of $625 million was up 12 percent from 2004, due primarily to increasing loan volume and higher interest rates.

Average loan balances grew 9 percent in 2005, led by a 16 percent increase in residential mortgage loans and a 9 percent rise in commercial lending. Commercial real estate mortgages increased 2 percent, and construction lending was flat.

City National's net interest margin averaged 4.79 percent in 2005, up from 4.54 percent in the previous year. The increase was attributable to a 200-basis-point increase in the bank's prime rate, which was offset partly by higher deposit costs.

City National's prime rate was 7.25 percent on December 31, 2005, up from 6.75 percent on September 30, 2005 and 5.25 percent at the end of 2004.

Dollars in millions                2005            2004     Change
-------------------------- --------------  --------------  --------
Average Loans                  $8,875.4        $8,106.7          9
Average Securities              4,075.9         3,689.0         10
Average Deposits               11,778.8        11,275.0          4
Average Core Deposits          10,765.3        10,425.5          3
Fully Taxable-Equivalent
Net Interest Income               624.8           559.5         12
Net Interest Margin                4.79%           4.54%         6

Average deposits grew 4 percent in 2005, reaching $11.8 billion.

Average securities totaled $4.1 billion in 2005, a 10 percent increase from the previous year. At December 31, 2005 the average duration of total available-for-sale securities was 3.0 years. It also was 3.0 years at the end of 2004.

NONINTEREST INCOME

Noninterest income reached $208 million in 2005, up 13 percent from the previous year. It now accounts for 25 percent of City National's total revenue. The increase last year was due largely to the continued growth of City National's wealth management business and international services fees.

Wealth Management