News Release

Printer Friendly Version View printer-friendly version
<< Back
City National Corp. Reports Third-Quarter 2010 Net Income of $34.4 Million

Average deposits rise 24 percent from third quarter of 2009
Total assets up 19 percent to $21.8 billion
Credit quality continues to improve

LOS ANGELES, Oct. 21, 2010 (GLOBE NEWSWIRE) -- City National Corporation (NYSE:CYN), the parent company of wholly owned City National Bank, today reported third-quarter 2010 net income and net income available to common shareholders of $34.4 million, or $0.65 per share. In the third quarter of 2009, net income was $8.0 million, while net income available to common shareholders was $2.5 million, or $0.05 per share.

Third-quarter 2010 net income included two unusual items primarily related to one of the company's FDIC-assisted acquisitions and the repayment of debt. Excluding these items, third-quarter net income totaled $40.3 million, or $0.76 per share.1

Year to date, City National's net income totaled $91.4 million. Net income available to common shareholders was $85.7 million, or $1.62 per share. In the first nine months of 2009, the company earned net income of $22.3 million, while net income available to common shareholders amounted to $5.8 million, or $0.11 per share.

The company also announced today that its Board of Directors has again declared a 2010 quarterly common stock cash dividend of $0.10 per share. The quarterly dividend is payable on November 17, 2010 to stockholders of record on November 3, 2010.

THIRD-QUARTER 2010 HIGHLIGHTS

-- Third-quarter revenue totaled $254.5 million, up 11 percent from the third quarter of 2009.

-- Fully taxable-equivalent net interest income amounted to $191.1 million, up 16 percent from the same period last year and 3 percent from the second quarter of 2010. City National's net interest margin averaged 3.84 percent in the third quarter of 2010, down from 3.93 percent in the second quarter of 2010 due largely to strong growth in deposits, which were invested in securities available-for-sale and other liquid assets.

-- Average deposit balances, including those acquired in three FDIC-assisted transactions, grew to a record $18.3 billion, up 24 percent from $14.8 billion in the third quarter of 2009 and 4 percent from $17.6 billion in the second quarter of this year. Average core deposits grew 27 percent from the third quarter of last year and 5 percent from the second quarter of 2010. Core deposits now amount to approximately 94 percent of total average balances.

-- Average loans, excluding loans covered by City National's acquisition-related loss-sharing agreements with the FDIC, were $11.4 billion, down 7 percent from the same period last year and 1 percent from the second quarter of 2010. The declines reflected weak loan demand due to current business and economic conditions, along with continued progress in reducing the number of problem loans.

-- Third-quarter 2010 net income included a $13 million provision for credit losses on non-FDIC covered loans, 59 percent lower than it was in the second quarter of 2010. Net charge-offs declined 16 percent from the second quarter of 2010, while nonperforming assets, excluding FDIC-covered assets, declined 5 percent.

-- Third-quarter 2010 earnings included two unusual items. Among them was a pretax purchase gain of $2.1 million, related to an FDIC-assisted acquisition. The company also recorded a pretax charge of $12.3 million for the early retirement of debt. After tax, these items amounted to a net charge of $5.9 million, or $0.11 per share. Excluding them, third-quarter net income was $40.3 million, or $0.76 per share.1

-- On September 13, City National completed the sale of $300 million of 10-year 5.25 percent senior notes and used most of the net proceeds on October 16 to redeem $250 million of 9.625 percent cumulative trust preferred securities.

"These third-quarter results reflect the underlying strength and continuing improvement of City National's business," said Chief Executive Officer Russell Goldsmith. "Deposits again reached new record levels. Asset quality improved for the fourth straight quarter as credit costs declined. The company's balance sheet continued to grow stronger with its successful senior debt offering, its trust preferred securities redemption and its growing capital base. The integration of 1st Pacific Bank added five offices in San Diego, as we continued to invest in City National's future growth with the selective addition of new colleagues, resources and capabilities for clients.

"It's worth adding that City National continues to energetically seek out quality lending relationships, as evidenced by the increases in our commercial and single-family residential loan portfolios, and that City National does not have the foreclosure problems and risks that are getting headline attention at some of the nation's largest banks."

                                        For the three months               For the
                                                ended                        three

  Dollars in millions,                      September 30,                   months
                                       ----------------------        %       ended       %

                                                                           June 30,
  except per share                        2010        2009        Change     2010     Change
  -----------------------------------  ----------  ----------     ------  ----------  ------
  Earnings Per Share                       $ 0.65      $ 0.05      1,200      $ 0.78    (17)

  Net Income Attributable to CNC           $ 34.4       $ 8.0        328      $ 41.3    (17)
  Less: Dividends and Accretion on
   Preferred Stock                             --         5.5                     --
                                       ----------  ----------      (100)  ----------      NM
  Net Income Available to Common
   Shareholders                            $ 34.4       $ 2.5                 $ 41.3
                                       ==========  ==========      1,257  ==========    (17)

  Average Assets                         21,614.7    17,938.2         20    20,799.2       4
  Return on Average Assets                 0.63 %      0.18 %        250      0.80 %    (21)
  Return on Average Common
   Shareholders' Equity                    7.06 %      0.56 %      1,161      8.93 %    (21)

ASSETS

Total assets at September 30, 2010 grew to a record $21.8 billion, up 19 percent from the third quarter of 2009. The increase reflects the company's three FDIC-assisted acquisitions and strong growth in securities due to high growth in deposits.

REVENUE

Revenue for the third quarter of 2010 was $254.5 million, up 11 percent from the third quarter of 2009 but down 16 percent from the second quarter of this year. The decline from the second quarter was due principally to lower acquisition-related purchase gains.

NET INTEREST INCOME

Fully taxable-equivalent net interest income was $191.1 million in the third quarter of 2010, up 16 percent from the same period last year and 3 percent from the second quarter of this year.

Third-quarter average deposits reached a record $18.3 billion, up 24 percent from the third quarter of 2009 and 4 percent from the second quarter of this year. Average core deposits were $17.2 billion in the third quarter of 2010, up 27 percent from the same period of 2009 and 5 percent from the second quarter of 2010.

Third-quarter 2010 average noninterest-bearing deposits were up 13 percent from the same period of 2009 and 2 percent from the second quarter of 2010.

Treasury Services deposit balances, which consist primarily of title, escrow, community association and property management deposits, averaged $1.5 billion in the third quarter of this year, up 55 percent from the same period of 2009 and 8 percent from the second quarter of 2010 due to the addition of new clients and an increase in residential real estate refinance activity.

Third-quarter average loan balances, excluding FDIC-covered loans, were $11.4 billion, down 7 percent from the third quarter of 2009 and 1 percent from the second quarter of this year. The declines reflect relatively weak loan demand due to challenging business and economic conditions, along with the company's continued progress in reducing the number of problem loans. Average FDIC-covered loans totaled $2.0 billion for the third quarter of 2010, virtually unchanged from the second quarter of this year.

Average balances for commercial loans were down 9 percent from the same period last year and 1 percent from the second quarter of 2010. Average balances for commercial real estate and construction loans together were down 18 percent from the third quarter of 2009 and 5 percent from the second quarter of this year. Average balances for single-family residential mortgage loans, nearly all of which are made to City National's private banking clients, were up 2 percent from the year-ago period and 1 percent from the second quarter of 2010.

Average securities for the third quarter of 2010 totaled $5.0 billion, up 37 percent from the same period last year and 17 percent from the second quarter of 2010. The increases reflect the company's strong deposit growth and relatively weak loan demand due to economic conditions. The average duration of total available-for-sale securities at September 30, 2010 was 2.1 years, down from 2.6 years at the end of the third quarter of 2009 and 2.3 years at June 30, 2010.

City National's net interest margin in the third quarter of 2010 averaged 3.84 percent, compared with 3.94 percent in third quarter of 2009 and 3.93 percent in the second quarter of this year. The declines were due primarily to strong growth in deposits, which were invested in securities available--for-sale and other liquid assets.

Third-quarter net interest income included $9.2 million in net interest income from the acceleration of a discount recognized for covered loans that were repaid during the quarter. This compares with $4.3 million of additional net interest income in the second quarter of 2010.

At September 30, 2010, City National's prime lending rate was 3.25 percent, unchanged from both September 30, 2009 and June 30, 2010.

                                                                     For the
                              For the three months ended             three

                                     September 30,
                              --------------------------     %    months ended     %

                                                                    June 30,
  Dollars in millions             2010          2009      Change      2010      Change
  --------------------------  ------------  ------------  ------  ------------  ------
  Average Loans and Leases,
   excluding Covered Loans      $ 11,414.9    $ 12,339.0     (7)    $ 11,581.9     (1)
  Average Covered Loans            2,015.7            --      NM       2,002.9       1
  Average Total Securities         4,980.2       3,630.3      37       4,243.8      17
  Average Earning Assets          19,755.4      16,587.7      19      18,890.9       5
  Average Deposits                18,297.2      14,776.9      24      17,600.3       4
  Average Core Deposits           17,200.7      13,556.1      27      16,453.5       5
  Fully Taxable-Equivalent
   Net Interest Income               191.1         164.9      16         185.3       3
  Net Interest Margin               3.84 %        3.94 %     (3)        3.93 %     (2)

COVERED ASSETS

Loans and OREO assets acquired in City National's three FDIC-assisted acquisitions totaled $2.0 billion at the end of the third quarter of 2010.

In the third quarter, the company recorded a $4.9 million non-cash net charge related to covered loans. The charge reflected a provision for loan losses of $8.2 million for covered loans minus $3.3 million of other income from City National's loss-sharing agreements with the FDIC. The loss on covered loans is mainly the result of lower projected interest cash flows due to the company's revised default forecasts, though credit losses remain in line with previous expectations. City National will continue to update these cash-flow projections on a quarterly basis. Due to the uncertainty in the future performance of the covered loans, additional impairments may be recognized in the future.

OREO assets acquired by City National in three FDIC-assisted acquisitions and subject to loss-sharing agreements totaled $110.4 million at September 30, 2010, compared to $98.8 million at the end of the second quarter.

NONINTEREST INCOME

Noninterest income was $66.8 million in the third quarter of 2010, down 3 percent from one year ago. However, third-quarter 2010 noninterest income reflects two unusual items: One is the $2.1 million gain from one of City National's FDIC-assisted acquisitions. The other is a charge of $12.3 million for the early retirement of $175 million of debt.

Excluding these items, third-quarter noninterest income was up 12 percent from the same period last year.1

In the third quarter of 2010, noninterest income accounted for 26 percent of City National's total revenue.

Wealth Management

City National's assets under management totaled $35.7 billion as of September 30, 2010, up 2 percent from the same period of 2009 and 4 percent from the second quarter of this year. These changes were caused in part by fluctuations in equity market values.

Trust and investment fees were up 1 percent from the third quarter of 2009, but down 4 percent from the second quarter of this year. Money market mutual fund and brokerage fees were up 7 percent from the year-ago period and 19 percent from the second quarter of 2010, due largely to higher balances and increased trading activity.

                                                                                          At or for
                                                              At or for the                 the
                                                                                            three
                                                           three months ended              months

                                                              September 30,
                                                         ----------------------     %       ended       %

                                                                                          June 30,
  Dollars in millions                                       2010        2009     Change     2010     Change
  -----------------------------------------------------  ----------  ----------  ------  ----------  ------

  Trust and Investment Fee Revenue                           $ 32.7      $ 32.3       1      $ 34.0     (4)
  Brokerage and Mutual Fund Fees                                6.5         6.0       7         5.5      19
  Assets Under Management (1)(2)                           35,690.0    34,927.4       2    34,172.3       4
  Assets Under Management or Administration (1)(2)         56,890.6    53,368.1       7    54,613.8       4

  (1) Excludes $16.9 billion, $12.9 billion, and $9.9 billion of assets under management for an asset
   manager in which City National held a noncontrolling ownership interest as of September 30, 2010, June
   30, 2010, and September 30, 2009, respectively.

  (2) Excludes $2.1 billion and $1.9 billion of assets under management and administration as of September
   30, 2010 and June 30, 2010, respectively, for an asset manager that City National deconsolidated
   effective November 1, 2009.

Other Noninterest Income

Income from cash management and deposit transaction fees was $11.6 million in the third quarter, down 12 percent from the third quarter of 2009 and 3 percent from the second quarter of this year. The decreases were due to higher deposit balances used to offset service charge fees.

Fee income from foreign exchange services and letters of credit was unchanged from the third quarter of 2009, but down 6 percent from the second quarter of this year largely reflecting lower seasonal demand for these services.

Other income was $2.7 million in the third quarter of 2010, down 57 percent from the year-ago period and 76 percent from the second quarter of this year. The decreases were due primarily to the $12.3 million charge for early debt retirement.

NONINTEREST EXPENSE

Third-quarter 2010 noninterest expense amounted to $184.7 million, up 28 percent from the third quarter of 2009. Contributing to this increase were the company's three FDIC-assisted acquisitions. Third-quarter expense growth reflected higher compensation costs, FDIC assessments, legal and professional fees, and expenses related to covered assets, including other real estate owned properties. Many of the qualified covered asset-related expenses are reimbursed by the FDIC and reflected in noninterest income.

Noninterest expense was down 1 percent from the second quarter of this year, reflecting lower costs for OREO, legal and professional services, advertising and marketing.

CREDIT QUALITY

The following credit quality information excludes loans subject to loss-sharing agreements involving City National's FDIC-assisted transactions:

Net loan charge-offs in the third quarter of 2010 totaled $28.2 million, or 0.98 percent of total loans and leases on an annualized basis, down from $33.5 million, or 1.16 percent, in the second quarter of this year. Net charge-offs were $76.9 million, or 2.47 percent of total loans and leases, in the third quarter of 2009.

At September 30, 2010, nonperforming assets amounted to $297.6 million, or 2.59 percent of the company's total loans and leases and OREO, down from $314.6 million, or 2.73 percent, at June 30, 2010, and $452.2 million, or 3.70 percent, at September 30, 2009. Nonaccrual loans at September 30, 2010 were $239.1 million, down from $260.1 million at June 30, 2010 and $408.3 million at September 30, 2009.

                                             As of                   As of                   As of

                                      September 30, 2010         June 30, 2010        September 30, 2009
                                    ----------------------  ----------------------  ----------------------

  Period-end Loans (in millions)       Total    Nonaccrual     Total    Nonaccrual     Total    Nonaccrual
  --------------------------------  ----------  ----------  ----------  ----------  ----------  ----------

  Commercial Loans                   $ 4,364.1      $ 28.9   $ 4,286.1      $ 46.5   $ 4,594.7      $ 90.7
  Commercial Real Estate Mortgages     1,967.9        50.4     2,078.0        57.2     2,164.4        60.8
  Residential Mortgages                3,586.9        16.2     3,577.9        11.5     3,541.5        13.0
  Real Estate Construction Loans         575.1       135.8       629.9       138.9       999.0       233.9
  Equity Lines of Credit                 757.2         5.6       742.1         3.9       694.7         2.5

  Other Loans                            167.4         2.2       169.0         2.1       174.2         7.4
                                    ----------  ----------  ----------  ----------  ----------  ----------
   Total Loans (1)                  $ 11,418.6     $ 239.1  $ 11,483.0     $ 260.1  $ 12,168.5     $ 408.3

  Other Real Estate Owned (1)                         58.5                    54.5                    43.9

  Total Nonperforming Assets, excluding
                                                ----------              ----------              ----------

   Covered Assets                                  $ 297.6                 $ 314.6                 $ 452.2
                                                ==========              ==========              ==========

  (1) Excludes covered loans, net of allowance, of $1.9 billion and $2.0 billion at September 30, 2010 and
   June 30, 2010, respectively, and covered other real estate owned of $110.4 million and $98.8 million at
   September 30, 2010 and June 30, 2010, respectively.

City National's third-quarter provision for credit losses totaled $13 million, down from $32 million in the second quarter of 2010 and $85 million in the third quarter of 2009.

At September 30, 2010, City National's allowance for loan and lease losses totaled $274.2 million, or 2.40 percent of total loans and leases. That compares with $290.5 million, or 2.53 percent, at the end of the second quarter of 2010 and $265.0 million, or 2.18 percent, at September 30, 2009. The company also maintains an additional $20.4 million in reserves for off-balance-sheet credit commitments.

City National's provision reflects management's continuing assessment of the loan portfolio's credit quality and economic conditions. This assessment takes into account a broad range of economic factors, including net loan charge-offs, nonaccrual loans, specific reserves, risk-rating migration and changes in the portfolio size and composition.

Commercial Loans

Commercial loans accounted for $17.9 million of City National's net charge-offs, down from $21.3 million in the second quarter of this year, and $28.9 million in the year-earlier period. The majority of commercial loan net charge-offs in the third quarter of 2010 were tied to companies in real estate-related industries.

Commercial loans on nonaccrual totaled $28.9 million, down from $46.5 million at June 30, 2010, and $90.7 million at September 30, 2009.

Construction Loans

City National's $575 million commercial real estate construction portfolio includes secured loans to developers of residential and nonresidential properties. The company has reduced this portfolio by 42 percent since September 30, 2009, and construction loans now account for just 5 percent of the company's total loans.

In the third quarter of 2010 -- for the first time since the second quarter of 2007 -- the company recorded no construction loan net charge-offs. This compares to net charge-offs of $10.9 million in the second quarter of 2010 and $42.7 million in the third quarter of 2009. At September 30, 2010, construction loans on nonaccrual totaled $135.8 million, down from $138.9 million at June 30, 2010, and $233.8 million at September 30, 2009.

The company's portfolio of loans to residential developers totaled $115 million at September 30, 2010 -- 1 percent of City National's total loan portfolio. Loans to residential developers accounted for 33 percent of all construction loans on nonaccrual at September 30, 2010.

The remainder of City National's construction portfolio consists of loans to developers of nonresidential projects. Nonresidential construction loans amounted to $460 million at September 30, 2010, down from $496 million at June 30, 2010, and $759 million at the same time last year. Nonresidential construction loans on nonaccrual were $90 million, virtually unchanged from the second quarter of this year and down from $137 million in the third quarter of 2009.

Commercial Real Estate Mortgage Loans

Third-quarter net charge-offs in the company's $2.0 billion commercial real estate mortgage portfolio were $9.0 million, up from $0.4 million in the second quarter of 2010, and $3.4 million in the third quarter of 2009.

Commercial real estate mortgage loans on nonaccrual totaled $50.4 million, down from $57.2 million at June 30, 2010, and $60.8 million at September 30, 2009.

Residential Mortgage Loans and Equity Lines of Credit

City National's $3.6 billion residential mortgage portfolio and $757 million home-equity portfolio continued to perform well. Together, they accounted for $1.4 million in net charge-offs, a slight increase from $0.9 million at June 30, 2010, and $1.1 million at September 30, 2009. Residential mortgage loans and lines of credit on nonaccrual were $21.8 million in the third quarter of 2010, compared to $15.4 million in the second quarter of this year and $15.5 million in the third quarter of 2009.

During the first nine months of 2010, City National completed only five foreclosures in its $4.3 billion portfolio of residential mortgages and equity lines.

INCOME TAXES

City National's third-quarter 2010 effective tax rate was 27.7 percent, compared to a tax benefit in the year-ago period. The higher tax rate for the third quarter of this year is attributable to higher pretax income.

2010 YEAR-TO-DATE HIGHLIGHTS

-- Revenue for the first nine months of this year was $811.5 million, compared with $642.2 million for the first three quarters of 2009.

-- Fully taxable-equivalent net interest income amounted to $555.2 million, up 18 percent from $472.1 million in the first nine months of 2009. The company's net interest margin averaged 3.91 percent in the first nine months of 2010, down from 3.97 percent during the same period of the prior year.

-- Average deposits for the first nine months of this year amounted to $17.6 billion, up 27 percent from the same period of 2009. Core deposit balances totaled $16.4 billion in the first three quarters of 2010, up 31 percent from the first nine months of 2009.

-- Average loans, excluding FDIC-covered loans, totaled $11.6 billion, down 6 percent from the first nine months of 2009.

-- Noninterest income totaled $266.3 million, up 48 percent from the first nine months of 2009.

-- Year to date, excluding FDIC-covered loans, City National's provision for credit losses on loans and leases totaled $100 million. The company made provisions of $205 million during the first nine months of 2009.

-- Noninterest expense for the first nine months of 2010 was up 30 percent from the same period of 2009, due primarily to the company's three FDIC-assisted acquisitions.

CAPITAL LEVELS

City National remains well-capitalized and continues to add capital, ending the third quarter of 2010 with a Tier 1 common shareholders' equity ratio of 10.0 percent, compared to 9.2 percent at September 30, 2009, and 9.7 percent at June 30, 2010.1

Total risk-based capital and Tier 1 risk-based capital ratios at September 30, 2010 were 14.7 percent and 12.0 percent, respectively. City National's Tier 1 leverage ratio at September 30, 2010 was 7.8 percent. All of City National's capital ratios are above minimum regulatory standards for "well-capitalized" institutions.

Total risk-based capital, Tier 1 risk-based capital and the Tier 1 leverage ratios at June 30, 2010 were 14.7 percent, 11.7 percent and 8.0 percent, respectively.

Due to strong growth in assets, the period-end ratio of shareholders' equity to total assets at September 30, 2010 was 9.1 percent, compared to 12.1 percent at September 30, 2009, and 9.1 percent at June 30, 2010.

On September 13, City National completed the sale of $300 million of 10-year 5.25 percent senior notes. The company used most of the net proceeds from this offering to redeem $250 million of 9.625 percent cumulative trust preferred securities on October 16, 2010. Excluding the trust preferred securities, which currently qualify as Tier 1 capital, City National's pro-forma Tier 1 risk-based capital ratio was 10.1 percent at September 30, 2010.1

2010 OUTLOOK

Management continues to expect increased profitability in 2010 over 2009.

CONFERENCE CALL

City National Corporation will host a conference call this afternoon to discuss third-quarter 2010 financial results. The call will begin at 2:00 p.m. PDT. Analysts and investors may dial in and participate in the question/answer session. To access the call, please dial (866) 393-6804 and enter Conference ID 11680865. A listen-only live broadcast of the call also will be available on the investor relations page of the company's Website at cnb.com. There, it will be archived and available for 12 months.

ABOUT CITY NATIONAL

City National Corporation's wholly owned subsidiary, City National Bank, provides banking, investment and trust services through 79 offices, including 17 full-service regional centers, in Southern California, the San Francisco Bay Area, Nevada and New York City. The corporation and its seven consolidated investment affiliates manage or administer $56.9 billion in client investment assets, including nearly $36 billion under direct management.

For more information about City National, visit the company's Website at cnb.com.

The City National Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3142

SAFE-HARBOR LANGUAGE

This news release contains forward-looking statements for which the company claims the protection of the safe harbor contained in the Private Securities and Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties.

A number of factors, many of which are beyond the Company's ability to control or predict, could cause future results to differ materially from those contemplated by such forward-looking statements. These factors include (1) local, regional and international business, economic and political conditions, (2) volatility in financial markets, including capital and credit markets, (3) significant changes in banking laws or regulations, including without limitation, the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the new rules and regulations to be promulgated by supervisory and oversight agencies implementing the new legislation, (4) increases and required prepayments in Federal Deposit Insurance Corporation ("FDIC") premiums and special federal assessments on financial institutions due to market developments and regulatory changes, (5) changes in the level of nonperforming assets, charge-offs, other real estate owned and provision expense, (6) incorrect assumptions in the value of the loans acquired in FDIC-assisted acquisitions resulting in greater than anticipated losses in the acquired loan portfolios exceeding the losses covered by the loss-sharing agreements with the FDIC, (7) changes in inflation, interest rates, and market liquidity which may impact interest margins and impact funding sources, (8) adequacy of the Company's enterprise risk management framework, (9) the Company's ability to increase market share and control expenses, (10) the Company's ability to attract new employees and retain and motivate existing employees, (11) increased competition in the Company's markets, (12) changes in the financial performance and/or condition of the Company's borrowers, including changes in levels of unemployment, changes in customers' suppliers, and other counterparties' performance and creditworthiness, (13) a substantial and permanent loss of either client accounts and/or assets under management at the Company's investment advisory affiliates or its wealth management division, (14) changes in consumer spending, borrowing and savings habits, (15) soundness of other financial institutions which could adversely affect the Company, (16) protracted labor disputes in the Company's markets, (17) earthquake, fire or other natural disasters affecting the condition of real estate collateral, (18) the effect of acquisitions and integration of acquired businesses and de novo branching efforts, (19) the impact of changes in regulatory, judicial or legislative tax treatment of business transactions, (20) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies, and (21) the success of the Company at managing the risks involved in the foregoing.

Forward-looking statements speak only as of the date they are made, and the company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the statements are made, or to update earnings guidance, including the factors that influence earnings. For a more complete discussion of these risks and uncertainties, see the company's Annual Report on Form 10-K for the year ended December 31, 2009 and particularly Part I, Item 1A, titled "Risk Factors."

1 For notes on non-GAAP measures, see pages 13 and 14 of the Selected Financial Information.

  CITY NATIONAL CORPORATION
  FINANCIAL HIGHLIGHTS
  (unaudited)

                                         Three Months                   Nine Months
                                 ----------------------------  ----------------------------

  For The Period Ended                                    %                             %
   September 30,                    2010       2009    Change     2010       2009    Change
  -----------------------------  ---------  ---------  ------  ---------  ---------  ------
  Per Common Share
   Net income available to
    common shareholders
    Basic                           $ 0.65     $ 0.05   1,200     $ 1.63     $ 0.11   1,382
    Diluted                           0.65       0.05   1,200       1.62       0.11   1,373
   Dividends                          0.10       0.10      --       0.30       0.45    (33)
   Book value                                                      37.46      34.99       7

  Results of Operations: (In
   millions)
   Interest income                   $ 214      $ 180      19      $ 624      $ 526      19

   Interest expense                     26         19                 79         64
                                 ---------  ---------      38  ---------  ---------      23
    Net interest income                188        161      16        545        462      18
   Net interest income (Fully
    taxable-equivalent)                191        165      16        555        472      18
   Total revenue                       255        230      11        812        642      26
   Provision for credit losses
    on loans and leases,
    excluding covered loans             13         85    (85)        100        205    (51)
   Provision for losses on
    covered loans                        8         --      NM         55         --      NM
   Net income attributable to
    City National Corporation           34          8     328         91         22     311
   Net income available to
    common shareholders                 34          3   1,257         86          6   1,386

  Financial Ratios:
   Performance Ratios:
    Return on average assets        0.63 %     0.18 %             0.58 %     0.17 %
    Return on average common
     shareholders' equity             7.06       0.56               6.10       0.45
    Period-end equity to
     period-end assets                                              9.06      12.06
    Net interest margin               3.84       3.94               3.91       3.97
    Expense to revenue ratio         66.91      60.75              61.09      64.01
   Capital Adequacy Ratios
    (Period-end):
    Tier 1 leverage                                                 7.82       9.66
    Tier 1 risk-based capital                                      11.97      12.31
    Total risk-based capital                                       14.74      15.35

  Asset Quality Ratios:
   Allowance for loan and lease
    losses to:
    Total loans and leases,
     excluding covered loans                                      2.40 %     2.18 %
    Nonaccrual loans                                              114.66      64.91
   Nonperforming assets,
    excluding covered assets,
    to:
    Total loans and leases and
     other real estate owned,
     excluding covered assets                                       2.59       3.70
    Total assets                                                    1.36       2.46
   Net charge-offs to average
    total loans and leases,
    excluding covered loans
    (annualized)                  (0.98) %   (2.47) %           (1.28) %   (1.81) %

  Average Balances: (In
   millions)
   Loans and leases, excluding
    covered loans                 $ 11,415   $ 12,339     (7)   $ 11,645   $ 12,363     (6)
   Covered loans                     2,016         --      NM      1,951         --      NM
   Securities                        4,980      3,630      37      4,424      3,142      41
   Interest-earning assets          19,755     16,588      19     18,981     15,880      20
   Assets                           21,615     17,938      20     20,899     17,245      21
   Core deposits                    17,201     13,556      27     16,432     12,557      31
   Deposits                         18,297     14,777      24     17,592     13,888      27
   Interest-bearing liabilities     11,178      8,308      35     10,723      8,213      31
   Common shareholders' equity       1,935      1,787       8      1,879      1,718       9
   Total equity                      1,960      2,204    (11)      1,948      2,134     (9)

  Period-End Balances: (In
   millions)
   Loans and leases, excluding
    covered loans                                               $ 11,419   $ 12,168     (6)
   Covered loans                                                   1,910         --      NM
   Securities                                                      5,569      3,701      50
   Assets                                                         21,824     18,401      19
   Core deposits                                                  17,343     13,926      25
   Deposits                                                       18,414     15,108      22
   Common shareholders' equity                                     1,952      1,802       8
   Total equity                                                    1,977      2,218    (11)

  Wealth Management: (In
   millions) (1)(2)
   Assets under management                                      $ 35,690   $ 34,927       2
   Assets under management or
    administration                                                56,891     53,368       7

  (1) Excludes $16.9 billion and $9.9 billion of assets under management for an asset
   manager in which City National held a noncontrolling ownership interest as of
  September 30, 2010 and September 30, 2009, respectively.
  (2) Excludes $2.1 billion of assets under management or administration as of September
   30, 2010 for an asset manager that City National deconsolidated effective
  November 1, 2009.

  Note: Certain prior period balances have been reclassified to conform to current period
   presentation.

  CITY NATIONAL CORPORATION
  CONSOLIDATED STATEMENTS OF
   INCOME
  (unaudited)
                                         Three Months Ended                Nine Months Ended

  (Dollars in thousands                    September 30,                     September 30,
                                  --------------------------------  ------------------------------

                                                                                               %
   except per share data)            2010        2009     % Change     2010        2009     Change
  ------------------------------  ----------  ----------  --------  ----------  ----------  ------
  Interest income                  $ 214,061   $ 180,419        19   $ 623,930   $ 525,786      19

  Interest expense                    26,345      19,078                78,711      63,972
                                  ----------  ----------        38  ----------  ----------      23
   Net Interest Income               187,716     161,341        16     545,219     461,814      18

  Provision for credit losses on
   loans and leases, excluding
   covered loans                      13,000      85,000      (85)     100,000     205,000    (51)
  Provision for losses on
   covered loans                       8,233          --        NM      54,749          --      NM

  Noninterest Income
   Trust and investment fees          32,695      32,289         1     100,180      83,342      20
   Brokerage and mutual fund
    fees                               6,494       6,041         7      17,236      22,443    (23)
   Cash management and deposit
    transaction fees                  11,620      13,142      (12)      36,204      39,143     (8)
   International services              7,905       7,895         0      22,787      22,416       2
   Bank-owned life insurance             727         639        14       2,063       2,373    (13)
   FDIC loss sharing income, net       (377)          --        NM      37,048          --      NM
   Gain (loss) on securities             299       2,667      (89)       1,279    (10,556)     112
   Gain (loss) on disposal of
    assets                             2,603       (173)   (1,605)       1,180       (130)   1,008
   Gain on acquisition                 2,111          --        NM      27,339          --      NM

   Other                               2,721       6,345                20,991      21,366
                                  ----------  ----------      (57)  ----------  ----------     (2)
    Total noninterest income          66,798      68,845       (3)     266,307     180,397      48

  Noninterest Expense
   Salaries and employee
    benefits                         103,397      80,776        28     297,966     234,690      27
   Net occupancy of premises          14,463      12,613        15      40,715      37,433       9
   Legal and professional fees        10,633       8,706        22      33,570      24,347      38
   Information services                7,940       7,342         8      22,994      20,814      10
   Depreciation and amortization       6,351       6,472       (2)      19,061      18,417       3
   Amortization of intangibles         2,228       1,726        29       6,803       5,237      30
   Marketing and advertising           4,954       4,615         7      16,000      14,034      14
   Office services and equipment       4,035       3,610        12      12,105      11,136       9
   Other real estate owned            12,642       2,231       467      46,731       4,480     943
   FDIC assessments                    7,561       5,308        42      21,744      22,237     (2)

   Other                              10,477      10,366                29,613      28,059
                                  ----------  ----------         1  ----------  ----------       6

    Total noninterest expense        184,681     143,765               547,302     420,884
                                  ----------  ----------        28  ----------  ----------      30

  Income Before Taxes                 48,600       1,421     3,320     109,475      16,327     571


  Applicable Income Taxes             13,461     (6,966)                15,020     (6,320)
                                  ----------  ----------     (293)  ----------  ----------   (338)


  Net Income                        $ 35,139     $ 8,387              $ 94,455    $ 22,647
                                  ----------  ----------       319  ----------  ----------     317

   Less: Net income attributable
    to noncontrolling interest           721         348                 3,021         375
                                  ----------  ----------       107  ----------  ----------     706

  Net income attributable to
   City National Corporation        $ 34,418     $ 8,039              $ 91,434    $ 22,272
                                  ----------  ----------       328  ----------  ----------     311

   Less: Dividends on preferred
    stock                                 --       5,502                 5,702      16,504
                                  ----------  ----------     (100)  ----------  ----------    (65)

  Net income available to common
   shareholders                     $ 34,418     $ 2,537              $ 85,732     $ 5,768
                                  ==========  ==========     1,257  ==========  ==========   1,386

  Other Data:
   Earnings per common share -
    basic                             $ 0.65      $ 0.05     1,200      $ 1.63      $ 0.11   1,382
   Earnings per common share -
    diluted                           $ 0.65      $ 0.05     1,200      $ 1.62      $ 0.11   1,373
   Dividends paid per common
    share                             $ 0.10      $ 0.10        --      $ 0.30      $ 0.45    (33)
   Common dividend payout ratio      15.31 %     205.08%      (93)     18.36 %    385.15 %    (95)
   Return on average assets           0.63 %      0.18 %       250      0.58 %      0.17 %     241
   Return on average common
    shareholders' equity              7.06 %      0.56 %     1,161      6.10 %      0.45 %   1,256
   Net interest margin (Fully
    taxable-equivalent)               3.84 %      3.94 %       (3)      3.91 %      3.97 %     (2)
   Full-time equivalent
    employees                          3,195       2,891        11

  Note: Certain prior period balances have been reclassified to conform to
   current period presentation.

  CITY NATIONAL CORPORATION
  CONSOLIDATED QUARTERLY STATEMENTS OF
   INCOME
  (unaudited)

                                                       2010
                                  ---------------------------------------------
  (Dollars in thousands             Third      Second       First     Year to

   except per share data)          Quarter    Quarter     Quarter       Date
  ------------------------------  ---------  ----------  ----------  ----------
  Interest income                 $ 214,061   $ 207,803   $ 202,066   $ 623,930

  Interest expense                   26,345      25,805      26,561      78,711
                                  ---------  ----------  ----------  ----------
   Net Interest Income              187,716     181,998     175,505     545,219

  Provision for credit losses on
   loans and leases, excluding
   covered loans                     13,000      32,000      55,000     100,000
  Provision for losses on
   covered loans                      8,233      46,516          --      54,749

  Noninterest Income
   Trust and investment fees         32,695      33,976      33,509     100,180
   Brokerage and mutual fund
    fees                              6,494       5,461       5,281      17,236
   Cash management and deposit
    transaction fees                 11,620      12,008      12,576      36,204
   International services             7,905       8,374       6,508      22,787
   Bank-owned life insurance            727         658         678       2,063
   FDIC loss sharing income, net      (377)      28,339       9,086      37,048
   Gain (loss) on securities            299       (151)       1,131       1,279
   Gain (loss) on disposal of
    assets                            2,603     (2,814)       1,391       1,180
   Gain on acquisition                2,111      25,228          --      27,339

   Other                              2,721      11,557       6,713      20,991
                                  ---------  ----------  ----------  ----------
    Total noninterest income         66,798     122,636      76,873     266,307

  Noninterest Expense
   Salaries and employee
    benefits                        103,397      99,110      95,459     297,966
   Net occupancy of premises         14,463      13,347      12,905      40,715
   Legal and professional fees       10,633      13,754       9,183      33,570
   Information services               7,940       7,538       7,516      22,994
   Depreciation and amortization      6,351       6,363       6,347      19,061
   Amortization of intangibles        2,228       2,128       2,447       6,803
   Marketing and advertising          4,954       5,798       5,248      16,000
   Office services and equipment      4,035       4,272       3,798      12,105
   Other real estate owned           12,642      16,892      17,197      46,731
   FDIC assessments                   7,561       7,662       6,521      21,744

   Other                             10,477       9,823       9,313      29,613
                                  ---------  ----------  ----------  ----------

    Total noninterest expense       184,681     186,687     175,934     547,302
                                  ---------  ----------  ----------  ----------

  Income Before Taxes                48,600      39,431      21,444     109,475


  Applicable Income Taxes            13,461     (2,859)       4,418      15,020
                                  ---------  ----------  ----------  ----------


  Net Income                       $ 35,139    $ 42,290    $ 17,026    $ 94,455
                                  ---------  ----------  ----------  ----------

   Less: Net income attributable
    to noncontrolling interest          721         972       1,328       3,021
                                  ---------  ----------  ----------  ----------

  Net income attributable to
   City National Corporation       $ 34,418    $ 41,318    $ 15,698    $ 91,434
                                  ---------  ----------  ----------  ----------

   Less: Dividends on preferred
    stock                                --          --       5,702       5,702
                                  ---------  ----------  ----------  ----------

  Net income available to common
   shareholders                    $ 34,418    $ 41,318     $ 9,996    $ 85,732
                                  =========  ==========  ==========  ==========

  Other Data:
   Earnings per common share -
    basic                            $ 0.65      $ 0.78      $ 0.19      $ 1.63
   Earnings per common share -
    diluted                          $ 0.65      $ 0.78      $ 0.19      $ 1.62
   Dividends paid per common
    share                            $ 0.10      $ 0.10      $ 0.10      $ 0.30
   Common dividend payout ratio     15.31 %     12.71 %     52.16 %     18.36 %
   Return on average assets          0.63 %      0.80 %      0.31 %      0.58 %
   Return on average common
    shareholders' equity             7.06 %      8.93 %      2.20 %      6.10 %
   Net interest margin (Fully
    taxable-equivalent)              3.84 %      3.93 %      3.97 %      3.91 %
   Full-time equivalent
    employees                         3,195       3,144       2,983

  Note: Certain prior period balances have been reclassified to conform to
   current period presentation.

  CITY NATIONAL CORPORATION
  CONSOLIDATED QUARTERLY
   STATEMENTS OF INCOME
  (unaudited)

                                                             2009
                                  ----------------------------------------------------------
  (Dollars in thousands             Fourth       Third      Second       First     Year to

   except per share data)          Quarter     Quarter     Quarter     Quarter       Date
  ------------------------------  ----------  ----------  ----------  ----------  ----------
  Interest income                  $ 183,291   $ 180,419   $ 175,876   $ 169,491   $ 709,077

  Interest expense                    21,052      19,078      20,300      24,594      85,024
                                  ----------  ----------  ----------  ----------  ----------
   Net Interest Income               162,239     161,341     155,576     144,897     624,053

  Provision for credit losses on
   loans and leases, excluding
   covered loans                      80,000      85,000      70,000      50,000     285,000

  Noninterest Income
   Trust and investment fees          33,720      32,289      25,184      25,869     117,062
   Brokerage and mutual fund
    fees                               5,489       6,041       6,645       9,757      27,932
   Cash management and deposit
    transaction fees                  12,526      13,142      12,778      13,223      51,669
   International services              8,591       7,895       7,996       6,525      31,007
   Bank-owned life insurance             680         639         871         863       3,053
   FDIC loss sharing income, net         723          --          --          --         723
   Gain (loss) on securities           8,397       2,667       1,744    (14,967)     (2,159)
   Gain (loss) on disposal of
    assets                             1,406       (173)          43          --       1,276
   Gain on acquisition                38,206          --          --          --      38,206

   Other                               2,062       6,345       8,996       6,025      23,428
                                  ----------  ----------  ----------  ----------  ----------
    Total noninterest income         111,800      68,845      64,257      47,295     292,197

  Noninterest Expense
   Salaries and employee
    benefits                          85,586      80,776      75,765      78,149     320,276
   Net occupancy of premises          12,990      12,613      12,559      12,261      50,423
   Legal and professional fees        12,663       8,706       7,805       7,836      37,010
   Information services                7,021       7,342       6,992       6,480      27,835
   Depreciation and amortization       7,802       6,472       5,953       5,992      26,219
   Amortization of intangibles         2,120       1,726       1,668       1,843       7,357
   Marketing and advertising           6,092       4,615       4,743       4,676      20,126
   Office services and equipment       3,859       3,610       3,922       3,604      14,995
   Other real estate owned             4,445       2,231       2,155          94       8,925
   FDIC assessments                    5,816       5,308      13,861       3,068      28,053

   Other                              11,809      10,366       8,711       8,982      39,868
                                  ----------  ----------  ----------  ----------  ----------

    Total noninterest expense        160,203     143,765     144,134     132,985     581,087
                                  ----------  ----------  ----------  ----------  ----------

  Income Before Taxes                 33,836       1,421       5,699       9,207      50,163


  Applicable Income Taxes              4,434     (6,966)       (986)       1,632     (1,886)
                                  ----------  ----------  ----------  ----------  ----------


  Net Income                        $ 29,402     $ 8,387     $ 6,685     $ 7,575    $ 52,049
                                  ----------  ----------  ----------  ----------  ----------

   Less: Net income (loss)
    attributable to
    noncontrolling interest              335         348        (88)         115         710
                                  ----------  ----------  ----------  ----------  ----------

  Net income attributable to
   City National Corporation        $ 29,067     $ 8,039     $ 6,773     $ 7,460    $ 51,339
                                  ----------  ----------  ----------  ----------  ----------

   Less: Dividends and accretion
    on preferred stock                 9,399       5,502       5,501       5,501      25,903
                                  ----------  ----------  ----------  ----------  ----------

  Net income available to common
   shareholders                     $ 19,668     $ 2,537     $ 1,272     $ 1,959    $ 25,436
                                  ==========  ==========  ==========  ==========  ==========

  Other Data:
   Earnings per common share -
    basic                             $ 0.38      $ 0.05      $ 0.02      $ 0.04      $ 0.50
   Earnings per common share -
    diluted                           $ 0.38      $ 0.05      $ 0.02      $ 0.04      $ 0.50
   Dividends paid per common
    share                             $ 0.10      $ 0.10      $ 0.10      $ 0.25      $ 0.55
   Common dividend payout ratio      26.47 %    205.08 %    383.66 %    619.32 %    107.80 %
   Return on average assets           0.60 %      0.18 %      0.16 %      0.18 %      0.29 %
   Return on average common
    shareholders' equity              4.27 %      0.56 %      0.29 %      0.49 %      1.46 %
   Net interest margin (Fully
    taxable-equivalent)               3.74 %      3.94 %      3.98 %      4.00 %      3.91 %
   Full-time equivalent
    employees                          3,017       2,891       2,866       2,933

  Note: Certain prior period balances have been reclassified to conform to current period
   presentation.

  CITY NATIONAL CORPORATION
  CONSOLIDATED PERIOD END
   BALANCE SHEET
  (unaudited)

                                                  2010
                               -------------------------------------------
                                   Third         Second          First

  (In thousands)                  Quarter        Quarter        Quarter
  ---------------------------  -------------  -------------  -------------
  Assets
   Cash and due from banks         $ 224,363      $ 184,277      $ 293,855
   Federal funds sold                395,010        404,760         50,000
   Due from banks -
    interest-bearing                 506,081        336,244        429,157
   Securities
    available-for-sale             5,397,870      4,761,143      3,928,481
   Trading securities                170,750        129,287         68,405
   Loans and leases:
    Commercial                     4,364,143      4,286,104      4,424,233
    Commercial real estate
     mortgages                     1,967,959      2,078,003      2,121,941
    Residential mortgages          3,586,858      3,577,894      3,514,149
    Real estate construction         575,060        629,902        730,734
    Equity lines of credit           757,210        742,071        733,550

    Installment                      167,395        169,070        164,929
                               -------------  -------------  -------------
     Loans and leases,
      excluding covered loans     11,418,625     11,483,044     11,689,536
      Allowance for loan and
       lease losses                (274,167)      (290,492)      (292,799)
                               -------------  -------------  -------------
     Loans and leases,
      excluding covered
      loans, net                  11,144,458     11,192,552     11,396,737

    Covered loans (1)              1,910,133      2,034,591      1,803,048
                               -------------  -------------  -------------
     Net loans and leases         13,054,591     13,227,143     13,199,785
  Premises and equipment, net        123,427        121,960        123,178
  Goodwill and other
   intangibles                       522,592        524,820        523,135
  Other real estate owned (2)        168,853        153,292        135,551
  FDIC indemnification asset         324,240        394,012        325,356

  Other assets                       935,839        994,509        989,572
                               -------------  -------------  -------------

   Total assets                 $ 21,823,616   $ 21,231,447   $ 20,066,475
                               =============  =============  =============

  Liabilities
   Deposits:
    Noninterest-bearing          $ 8,455,164    $ 8,173,386    $ 7,881,959

    Interest-bearing               9,958,442      9,799,527      9,081,770
                               -------------  -------------  -------------
     Total deposits               18,413,606     17,972,913     16,963,729
   Federal funds purchased
    and securities sold under
    repurchase agreements                 --        177,700        183,884
   Other short-term borrowed
    funds                                710            700            730
   Subordinated debt                 335,033        337,691        339,392
   Other long-term debt              771,408        473,283        472,193

   Other liabilities                 278,729        294,578        196,471
                               -------------  -------------  -------------
    Total liabilities             19,799,486     19,256,865     18,156,399

   Redeemable noncontrolling
    interest                          46,967         47,622         46,665

  Equity
   City National Corporation
    shareholders' equity:
    Preferred stock                       --             --             --
    Common stock                      53,886         53,886         53,886
    Additional paid-in
     capital                         487,919        483,983        505,330
    Retained earnings              1,447,569      1,418,486      1,382,421
    Accumulated other
     comprehensive income             73,369         58,050         23,927

    Treasury shares                (110,769)      (112,634)      (127,342)
                               -------------  -------------  -------------
     Total common
      shareholders' equity         1,951,974      1,901,771      1,838,222
                               -------------  -------------  -------------
      Total shareholders'
       equity                      1,951,974      1,901,771      1,838,222

   Noncontrolling interest            25,189         25,189         25,189
                               -------------  -------------  -------------

    Total equity                   1,977,163      1,926,960      1,863,411
                               -------------  -------------  -------------
     Total liabilities and
      equity                    $ 21,823,616   $ 21,231,447   $ 20,066,475
                               =============  =============  =============

  (1) Covered loans are net of $50.1 million and $46.3 million of
   allowance for loan losses as of September 30, 2010 and June 30, 2010,
   respectively.
  (2) Other real estate owned includes $110.4 million, $98.8 million and
   $77.5 million covered by FDIC loss share at September 30, 2010, June
   30, 2010, and March 31, 2010, respectively.

  CITY NATIONAL CORPORATION
  CONSOLIDATED PERIOD END
   BALANCE SHEET
  (unaudited)


                                                         2009
                              ----------------------------------------------------------
                                 Fourth          Third         Second          First

  (In thousands)                 Quarter        Quarter        Quarter        Quarter
  --------------------------  -------------  -------------  -------------  -------------
  Assets
   Cash and due from banks        $ 364,483      $ 348,958      $ 350,931      $ 378,289
   Federal funds sold                 5,000        240,000        125,000         12,300
   Due from banks -
    interest-bearing                443,443        767,362        205,656        140,484
   Securities
    available-for-sale            4,306,758      3,512,072      3,330,326      2,915,883
   Trading securities               154,302        188,904        138,137         67,582
   Loans and leases:
    Commercial                    4,709,667      4,594,683      4,764,755      4,708,627
    Commercial real estate
     mortgages                    2,161,451      2,164,398      2,162,294      2,173,983
    Residential mortgages         3,533,453      3,541,534      3,511,598      3,413,538
    Real estate construction        835,589        999,045      1,116,154      1,189,594
    Equity lines of credit          734,182        694,660        691,226        651,127

    Installment                     172,566        174,170        175,315        168,245
                              -------------  -------------  -------------  -------------
     Loans and leases,
      excluding covered
      loans                      12,146,908     12,168,490     12,421,342     12,305,114
      Allowance for loan and
       lease losses               (288,493)      (265,005)      (256,018)      (241,586)
                              -------------  -------------  -------------  -------------
     Loans and leases,
      excluding covered
      loans, net                 11,858,415     11,903,485     12,165,324     12,063,528

    Covered loans                 1,851,821             --             --             --
                              -------------  -------------  -------------  -------------
     Net loans and leases        13,710,236     11,903,485     12,165,324     12,063,528
   Premises and equipment,
    net                             124,309        126,097        125,510        128,189
   Goodwill and other
    intangibles                     525,583        533,367        496,562        498,194
   Other real estate owned
    (1)                             113,866         43,969         18,064         12,639
   FDIC indemnification
    asset                           380,743             --             --             --

   Other assets                     950,034        736,390        705,275        716,442
                              -------------  -------------  -------------  -------------

    Total assets               $ 21,078,757   $ 18,400,604   $ 17,660,785   $ 16,933,530
                              =============  =============  =============  =============

  Liabilities
   Deposits:
    Noninterest-bearing         $ 7,753,936    $ 7,441,898    $ 7,118,660    $ 6,611,752

    Interest-bearing              9,625,512      7,666,545      7,379,591      7,077,798
                              -------------  -------------  -------------  -------------
     Total deposits              17,379,448     15,108,443     14,498,251     13,689,550
   Federal funds purchased
    and securities sold
    under repurchase
    agreements                      626,779        231,903        316,388        519,687
   Other short-term borrowed
    funds                               690            720         50,000         28,405
   Subordinated debt                340,137        341,587        162,434        164,296
   Other long-term debt             471,029        233,536        233,456        242,122

   Other liabilities                196,529        216,026        189,588        199,863
                              -------------  -------------  -------------  -------------
    Total liabilities            19,014,612     16,132,215     15,450,117     14,843,923

   Redeemable noncontrolling
    interest                         51,381         49,897         36,752         40,237

  Equity
   City National Corporation
    shareholders' equity:
   Preferred stock                  196,048        391,593        391,091        390,590
   Common stock                      53,886         53,886         53,886         50,961
   Additional paid-in
    capital                         513,550        514,904        511,939        393,114
   Retained earnings              1,377,639      1,363,176      1,365,842      1,369,451
   Accumulated other
    comprehensive income
    (loss)                          (3,049)         24,329       (18,110)       (23,093)

   Treasury shares                (151,751)      (154,245)      (156,119)      (157,094)
                              -------------  -------------  -------------  -------------
    Total common
     shareholders' equity         1,790,275      1,802,050      1,757,438      1,633,339
                              -------------  -------------  -------------  -------------
     Total shareholders'
      equity                      1,986,323      2,193,643      2,148,529      2,023,929

   Noncontrolling interest           26,441         24,849         25,387         25,441
                              -------------  -------------  -------------  -------------

    Total equity                  2,012,764      2,218,492      2,173,916      2,049,370
                              -------------  -------------  -------------  -------------
     Total liabilities and
      equity                   $ 21,078,757   $ 18,400,604   $ 17,660,785   $ 16,933,530
                              =============  =============  =============  =============

  (1) Other real estate owned includes $60.6 million covered by FDIC loss share at
   December 31, 2009.

  CITY NATIONAL
   CORPORATION
  CREDIT LOSS
   EXPERIENCE
  (unaudited)


                                     2010                                                 2009
                  -------------------------------------------  ---------------------------------------------------------
                    Third     Second       First     Year To     Fourth       Third      Second      First     Year To

  (Dollars in
   thousands)      Quarter    Quarter    Quarter       Date     Quarter     Quarter     Quarter     Quarter      Date
  --------------  ---------  ---------  ----------  ---------  ----------  ----------  ----------  ---------  ----------

  Allowance for
   Loan and
   Lease Losses
   (1)
  Balance at
   beginning of
   period         $ 290,492  $ 292,799   $ 288,493  $ 288,493   $ 265,005   $ 256,018   $ 241,586  $ 224,046   $ 224,046

  Net
   (charge-offs)
  /recoveries:
   Commercial      (17,871)   (21,290)    (13,532)   (52,693)    (23,088)    (28,852)    (17,283)   (18,459)    (87,682)
   Commercial
    real estate
    mortgages       (8,954)      (402)    (14,967)   (24,323)     (5,291)     (3,372)          --         --     (8,663)
   Residential
    mortgages         (572)      (610)     (1,391)    (2,573)       (625)       (682)       (731)      (367)     (2,405)
   Real estate
    construction         39   (10,944)    (14,183)   (25,088)    (27,562)    (42,651)    (36,189)   (14,049)   (120,451)
   Equity lines
    of credit         (793)      (337)       (210)    (1,340)       (550)       (387)     (1,039)       (38)     (2,014)

   Installment         (83)         88     (5,253)    (5,248)     (1,632)       (915)     (1,448)      (706)     (4,701)
                  ---------  ---------  ----------  ---------  ----------  ----------  ----------  ---------  ----------
    Total net
     (charge-off
    s)/recoverie
    s              (28,234)   (33,495)    (49,536)  (111,265)    (58,748)    (76,859)    (56,690)   (33,619)   (225,916)

  Provision for
   credit losses     13,000     32,000      55,000    100,000      80,000      85,000      70,000     50,000     285,000

  Transfers (to)
   from reserve
   for
   off-balance
   sheet credit
   commitments      (1,091)      (812)     (1,158)    (3,061)       2,236         846       1,122      1,159       5,363


                  ---------  ---------  ----------  ---------  ----------  ----------  ----------  ---------  ----------
  Balance at end
   of period      $ 274,167  $ 290,492   $ 292,799  $ 274,167   $ 288,493   $ 265,005   $ 256,018  $ 241,586   $ 288,493
                  =========  =========  ==========  =========  ==========  ==========  ==========  =========  ==========


  Net (Charge-Offs)/Recoveries to Average Total Loans and Leases,
   Excluding Covered Assets (annualized):

   Commercial      (1.66) %   (1.97) %    (1.20) %   (1.60) %    (1.99) %    (2.42) %    (1.47) %   (1.57) %    (1.87) %
   Commercial
    real estate
    mortgages      (1.75) %   (0.08) %    (2.82) %   (1.55) %    (0.97) %    (0.62) %      0.00 %     0.00 %    (0.40) %
   Residential
    mortgage       (0.06) %   (0.07) %    (0.16) %   (0.10) %    (0.07) %    (0.08) %    (0.08) %   (0.04) %    (0.07) %
   Real estate
    construction     0.03 %   (6.36) %    (7.12) %   (4.78) %   (11.92) %   (15.68) %   (12.59) %   (4.63) %   (11.01) %
   Equity lines
    of credit      (0.42) %   (0.18) %    (0.12) %   (0.24) %    (0.31) %    (0.22) %    (0.62) %   (0.02) %    (0.30) %
   Installment     (0.19) %     0.21 %   (12.54) %   (4.14) %    (3.74) %    (2.05) %    (3.33) %   (1.67) %    (2.70) %
    Total loans
     and leases,
     excluding
     covered
     loans         (0.98) %   (1.16) %    (1.68) %   (1.28) %    (1.93) %    (2.47) %    (1.84) %   (1.10) %    (1.84) %

  Reserve for Off-Balance
   Sheet Credit Commitments

  Balance at
   beginning of
   period          $ 19,310   $ 18,498    $ 17,340   $ 17,340    $ 19,576    $ 20,422    $ 21,544   $ 22,703    $ 22,703
   Transfers
    from (to)
    allowance         1,091        812       1,158      3,061     (2,236)       (846)     (1,122)    (1,159)     (5,363)
                  ---------  ---------  ----------  ---------  ----------  ----------  ----------  ---------  ----------
  Balance at end
   of period       $ 20,401   $ 19,310    $ 18,498   $ 20,401    $ 17,340    $ 19,576    $ 20,422   $ 21,544    $ 17,340
                  =========  =========  ==========  =========  ==========  ==========  ==========  =========  ==========

  (1) Allowance for loan and lease losses relates to total loans and leases, excluding covered loans. Allowance for loan
   losses for covered loans was $50.1 million and $46.3 million as of September 30, 2010 and June 30, 2010,
   respectively.

  CITY NATIONAL CORPORATION
  NONPERFORMING ASSETS
  (unaudited)


                                                     2010                                      2009
                                      ----------------------------------  ----------------------------------------------
                                         Third      Second       First      Fourth       Third      Second       First

  (Dollars in thousands)               Quarter     Quarter     Quarter     Quarter     Quarter     Quarter     Quarter
  ----------------------------------  ----------  ----------  ----------  ----------  ----------  ----------  ----------

  Nonperforming assets, excluding
   covered assets
   Nonaccrual loans, excluding
    covered loans
    Commercial                          $ 28,917    $ 46,530    $ 73,838    $ 81,989    $ 90,744    $ 80,372    $ 56,246
    Commercial real estate mortgages      50,366      57,155      66,194      76,027      60,833      36,112      16,923
    Residential mortgages                 16,259      11,506      12,045      15,488      12,961      17,262      13,270
    Real estate construction             135,778     138,909     164,985     202,605     233,848     237,828     223,416
    Equity lines of credit                 5,584       3,909       4,089       3,422       2,507       2,919       2,432

    Installment                            2,201       2,109       8,865       9,176       7,373       3,768       1,354
                                      ----------  ----------  ----------  ----------  ----------  ----------  ----------
     Total nonaccrual loans,
      excluding covered loans            239,105     260,118     330,016     388,707     408,266     378,261     313,641

   Other real estate owned,
    excluding covered OREO                58,462      54,451      58,025      53,308      43,969      18,064      12,639
                                      ----------  ----------  ----------  ----------  ----------  ----------  ----------

   Total nonperforming assets,
    excluding covered assets           $ 297,567   $ 314,569   $ 388,041   $ 442,015   $ 452,235   $ 396,325   $ 326,280
                                      ==========  ==========  ==========  ==========  ==========  ==========  ==========

  Nonperforming covered assets
   Nonaccrual loans                      $ 2,633        $ --        $ --        $ --        $ --        $ --        $ --

   Other real estate owned               110,391      98,841      77,526      60,558          --          --          --
                                      ----------  ----------  ----------  ----------  ----------  ----------  ----------
    Total nonperforming covered
     assets                            $ 113,024    $ 98,841    $ 77,526    $ 60,558        $ --        $ --        $ --
                                      ==========  ==========  ==========  ==========  ==========  ==========  ==========

  Loans 90 days or more past due on
   accrual status, excluding covered
   loans                                 $ 1,020       $ 789     $ 1,712     $ 5,689    $ 10,395        $ --    $ 16,261

  Covered loans 90 days or more past
   due on accrual status               $ 416,875   $ 362,722   $ 323,620   $ 173,309        $ --        $ --        $ --

  Allowance for loan and lease
   losses as a percentage of:
   Nonaccrual loans                     114.66 %    111.68 %     88.72 %     74.22 %     64.91 %     67.68 %     77.03 %
   Total nonperforming assets,
    excluding covered assets             92.14 %     92.35 %     75.46 %     65.27 %     58.60 %     64.60 %     74.04 %
   Total loans and leases, excluding
    covered loans                         2.40 %      2.53 %      2.50 %      2.38 %      2.18 %      2.06 %      1.96 %

  Nonaccrual loans as a percentage
   of total loans, excluding covered
   loans                                  2.09 %      2.27 %      2.82 %      3.20 %      3.36 %      3.05 %      2.55 %

  Nonperforming assets, excluding
   covered assets, as a percentage
   of:
   Total loans and other real estate
    owned, excluding covered assets       2.59 %      2.73 %      3.30 %      3.62 %      3.70 %      3.19 %      2.65 %
  Total assets                            1.36 %      1.48 %      1.93 %      2.10 %      2.46 %      2.24 %      1.93 %

  CITY NATIONAL CORPORATION
  AVERAGE BALANCES AND RATES
  (unaudited)


                                                                      2010
                                 -----------------------------------------------------------------------------

                                   Third Quarter      Second Quarter       First Quarter       Year to Date
                                 -----------------  ------------------  ------------------  ------------------
                                  Average  Average   Average   Average   Average   Average   Average   Average

  (Dollars in millions)           Balance   Rate     Balance    Rate     Balance    Rate     Balance    Rate
  -----------------------------  --------  -------  ---------  -------  ---------  -------  ---------  -------
  Assets
   Interest-earning assets
    Loans and leases
     Commercial                   $ 4,277   4.51 %    $ 4,339   4.50 %    $ 4,559   4.33 %    $ 4,390   4.44 %
     Commercial real estate
      mortgages                     2,027     5.60      2,098     5.59      2,151     5.49      2,092     5.56
     Residential mortgages          3,581     5.28      3,542     5.36      3,522     5.39      3,548     5.34
     Real estate construction         610     4.04        691     3.91        807     3.70        702     3.87
     Equity lines of credit           750     3.60        743     3.58        735     3.56        743     3.58

     Installment                      170                 169                 170                 170
                                 --------     5.27  ---------     5.16  ---------     5.14  ---------     5.19
      Total loans and leases,
      excluding covered loans      11,415     4.86     11,582     4.88     11,944     4.80     11,645     4.84

     Covered loans                  2,016               2,003               1,833               1,951
                                 --------     7.75  ---------     6.90  ---------     6.44  ---------     7.04
      Total loans and leases       13,431     5.28     13,585     5.18     13,777     5.03     13,596     5.16
    Due from banks -
     interest-bearing                 835     0.26        701     0.24        275     0.51        605     0.29
    Federal funds sold and
     securities
    purchased under resale
     agreements                       360     0.26        213     0.25         46     0.20        208     0.26
    Securities
     available-for-sale             4,922     3.02      4,190     3.28      3,974     3.39      4,366     3.21
    Trading securities                 58     0.23         54     0.18         62   (0.33)         58     0.01
    Other interest-earning
     assets                           149                 148                 147                 148
                                 --------     2.00  ---------     1.80  ---------     1.76  ---------     1.85
     Total interest-earning
      assets                       19,755     4.37     18,891     4.48     18,281     4.56     18,981     4.46
    Allowance for loan and
     lease losses                   (332)               (308)               (295)               (312)
    Cash and due from banks           212                 241                 299                 250

    Other non-earning assets        1,980               1,975               1,982               1,980
                                 --------           ---------           ---------           ---------

     Total assets                $ 21,615            $ 20,799            $ 20,267            $ 20,899
                                 ========           =========           =========           =========

  Liabilities and Equity
   Interest-bearing deposits
    Interest checking accounts    $ 1,703   0.19 %    $ 2,385   0.24 %    $ 2,235   0.24 %    $ 2,106   0.23 %
    Money market accounts           6,643     0.53      5,365     0.57      4,853     0.62      5,627     0.57
    Savings deposits                  293     0.39        301     0.45        387     0.66        327     0.52
    Time deposits - under
     $100,000                         400     0.29        414     0.83        556     0.62        456     0.59
    Time deposits - $100,000
     and over                       1,097               1,147               1,239               1,160
                                 --------     0.78  ---------     0.82  ---------     0.96  ---------     0.85
     Total interest-bearing
      deposits                     10,136     0.49      9,612     0.53      9,270     0.58      9,676     0.53

    Federal funds purchased and
     securities
    sold under repurchase
     agreements                       173     3.78        183     3.74        300     2.62        218     3.24

    Other borrowings                  869                 804                 812                 829
                                 --------     5.60  ---------     5.75  ---------     5.73  ---------     5.69
     Total interest-bearing
      liabilities                  11,178     0.94     10,599     0.98     10,382     1.04     10,723     0.98
   Noninterest-bearing deposits     8,161               7,988               7,594               7,916
   Other liabilities                  316                 330                 288                 312

   Total equity                     1,960               1,882               2,003               1,948
                                 --------           ---------           ---------           ---------
     Total liabilities and
      equity                     $ 21,615            $ 20,799            $ 20,267            $ 20,899
                                 ========           =========           =========           =========


  Fully taxable equivalent net
   interest and dividend income


  Net interest spread                       3.43 %              3.50 %              3.52 %              3.48 %
                                           =======             =======             =======             =======

  Net interest margin                       3.84 %              3.93 %              3.97 %              3.91 %
                                           =======             =======             =======             =======


  Average prime rate                        3.25 %              3.25 %              3.25 %              3.25 %
                                           =======             =======             =======             =======

 CITY NATIONAL
  CORPORATION
 AVERAGE BALANCES AND
  RATES
 (unaudited)



                                                                     2009
                     ----------------------------------------------------------------------------------------------------

                        Fourth Quarter      Third Quarter       Second Quarter      First Quarter        Year to Date
                     ----------------------------------------------------------------------------------------------------
                       Average   Average   Average   Average   Average   Average   Average   Average   Average   Average

 (Dollars in
  millions)            Balance     Rate    Balance     Rate    Balance     Rate    Balance     Rate    Balance     Rate
 ------------------------------------------------------------------------------------------------------------------------
 Assets
  Interest-earning
   assets
   Loans and leases
    Commercial           $ 4,607   4.30 %    $ 4,724   4.26 %    $ 4,721   4.21 %    $ 4,756   4.22 %    $ 4,702   4.25 %
    Commercial real
     estate mortgages      2,163     5.47      2,144     5.49      2,178     5.69      2,200     5.74      2,171     5.60
    Residential
     mortgages             3,534     5.56      3,528     5.50      3,454     5.51      3,406     5.58      3,481     5.54
    Real estate
     construction            917     3.88      1,079     3.58      1,153     3.04      1,232     3.20      1,094     3.40
    Equity lines of
     credit                  706     3.52        687     3.51        674     3.46        630     3.39        675     3.47

    Installment              173                 177                 174                 171                 174
                     -----------     5.10-----------     5.08-----------     5.05-----------     5.12-----------     5.09
     Total loans and
      leases,
      excluding
      covered loans       12,100     4.80     12,339     4.72     12,354     4.70     12,395     4.75     12,297     4.74

    Covered loans            264                  --                  --                  --                  66
                     -----------     6.10-----------     0.00-----------     0.00-----------     0.00-----------     6.10
     Total loans and
      leases              12,364     4.83     12,339     4.72     12,354     4.70     12,395     4.75     12,363     4.75
   Due from banks -
    interest-bearing         906     0.34        204     0.50        195     0.60        134     0.47        362     0.41
   Federal funds sold
    and securities
    purchased under
    resale agreements        375     0.13        338     0.15         15     0.23         11     0.24        186     0.14
   Securities
    available-for-sal
   e                       3,804     3.62      3,560     4.03      3,252     4.08      2,302     4.65      3,234     4.03
   Trading securities         74     1.95         71     0.18        112     1.36        115     0.19         93     0.89
   Other
    interest-earning
    assets                    84                  76                  75                  76                  77
                     -----------     3.48-----------     3.76-----------     3.45-----------     3.48-----------     3.54
    Total
     interest-earning
     assets               17,607     4.21     16,588     4.40     16,003     4.49     15,033     4.67     16,315     4.43
   Allowance for loan
    and lease losses       (276)               (260)               (246)               (236)               (255)
   Cash and due from
    banks                    313                 308                 324                 335                 320
   Other non-earning
    assets                 1,451               1,302               1,288               1,279               1,331
                     -----------         -----------         -----------         -----------         -----------

    Total assets        $ 19,095            $ 17,938            $ 17,369            $ 16,411            $ 17,711
                     ===========         ===========         ===========         ===========         ===========

 Liabilities and
  Equity
  Interest-bearing
   deposits
   Interest checking
    accounts             $ 2,027   0.21 %    $ 1,637   0.25 %    $ 1,388   0.29 %    $ 1,098   0.32 %    $ 1,541   0.26 %
   Money market
    accounts               4,093     0.64      4,232     0.66      4,111     0.86      3,897     1.01      4,084     0.79
   Savings deposits          306     0.63        262     0.64        222     0.74        166     0.65        239     0.66
   Time deposits -
    under $100,000           293     0.81        211     1.05        221     1.42        234     2.22        240     1.34
   Time deposits -
    $100,000 and over      1,221               1,221               1,311               1,463               1,303
                     -----------     1.04-----------     1.24-----------     1.56-----------     2.06-----------     1.50
    Total
     interest-bearing
     deposits              7,940     0.60      7,563     0.67      7,253     0.89      6,858     1.16      7,407     0.82

   Federal funds
    purchased and
    securities sold
    under repurchase
    agreements               236     3.38        234     3.41        472     1.77        723     1.22        415     2.00

   Other borrowings          639                 511                 494                 526                 542
                     -----------     4.41-----------     3.27-----------     1.75-----------     2.20-----------     3.01
    Total
     interest-bearing
     liabilities           8,815     0.95      8,308     0.91      8,219     0.99      8,107     1.23      8,364     1.02
  Noninterest-bearing
   deposits                7,790               7,214               6,770               5,983               6,945
  Other liabilities          249                 212                 234                 271                 241

  Total equity             2,241               2,204               2,146               2,050               2,161
                     -----------         -----------         -----------         -----------         -----------
    Total liabilities
     and equity         $ 19,095            $ 17,938            $ 17,369            $ 16,411            $ 17,711
                     ===========         ===========         ===========         ===========         ===========



 Net interest spread               3.26 %              3.49 %              3.50 %              3.44 %              3.41 %
                                =========           =========           =========           =========           =========

 Net interest margin               3.74 %              3.94 %              3.98 %              4.00 %              3.91 %
                                =========           =========           =========           =========           =========


 Average prime rate                3.25 %              3.25 %              3.25 %              3.25 %              3.25 %
                                =========           =========           =========           =========           =========

  Note: Certain prior period balances
   have been reclassified to conform to
   current period presentation.

  CITY NATIONAL
   CORPORATION
  CAPITAL AND CREDIT
   RATING DATA
  (unaudited)


                                            2010                                            2009
                         -----------------------------------------  ----------------------------------------------------
                           Third     Second      First     Year To   Fourth      Third     Second      First     Year To

                          Quarter    Quarter    Quarter     Date     Quarter    Quarter    Quarter    Quarter     Date
                         ---------  ---------  ---------  --------  ---------  ---------  ---------  ---------  --------
  Per Common Share:
  Shares Outstanding
   (in thousands):
   Average - Basic          52,105     52,012     51,690    51,937     51,509     51,482     50,416     48,046    50,272
   Average - Diluted        52,498     52,542     52,092    52,391     51,720     51,660     50,551     48,130    50,421
   Period-end               52,114     52,089     51,888               51,536     51,499     51,471     48,224
  Book value for common
   shareholders            $ 37.46    $ 36.51    $ 35.43              $ 34.74    $ 34.99    $ 34.14    $ 33.87
  Closing price:
   High                    $ 58.00    $ 64.13    $ 54.86   $ 64.13    $ 47.32    $ 43.80    $ 44.14    $ 47.76   $ 47.76
   Low                       47.91      51.23      45.81     45.81      36.59      33.13      31.87      22.83     22.83
   Period-end                53.07      51.23      53.97                45.60      38.93      36.83      33.77


  Capital Ratios
   (Dollars in
   millions):
  Risk-based capital
   Risk-weighted assets
    (1)                   $ 13,788   $ 13,807   $ 13,856             $ 14,431   $ 13,669   $ 13,887   $ 13,619
   Tier I common
    shareholders'
    equity                 $ 1,373    $ 1,337    $ 1,309              $ 1,286    $ 1,261    $ 1,293    $ 1,173
    Percentage of
     risk-weighted
     assets (2)             9.96 %     9.68 %     9.44 %               8.91 %     9.22 %     9.31 %     8.61 %
   Tier I capital          $ 1,651    $ 1,614    $ 1,586              $ 1,760    $ 1,682    $ 1,715    $ 1,594
    Percentage of
     risk-weighted
     assets                11.97 %    11.69 %    11.44 %              12.20 %    12.31 %    12.35 %    11.71 %
   Total capital           $ 2,032    $ 2,027    $ 1,998              $ 2,186    $ 2,099    $ 1,969    $ 1,845
    Percentage of
     risk-weighted
     assets                14.74 %    14.68 %    14.42 %              15.15 %    15.35 %    14.18 %    13.55 %
   Tier I leverage
    ratio                   7.82 %     7.96 %     8.03 %               9.48 %     9.66 %    10.16 %    10.04 %

  Period-end equity to
   period-end assets        9.06 %     9.08 %     9.29 %               9.55 %    12.06 %    12.31 %    12.10 %
  Period-end common
   shareholders' equity
   to period-end assets     8.94 %     8.96 %     9.16 %               8.49 %     9.79 %     9.95 %     9.65 %

  Average equity to
   average assets           9.07 %     9.05 %     9.88 %    9.32 %    11.73 %    12.29 %    12.35 %    12.49 %   12.20 %
  Average common
   shareholders' equity
   to average assets        8.95 %     8.93 %     9.10 %    8.99 %     9.56 %     9.96 %     9.96 %     9.96 %    9.85 %

  Period-end tangible
   equity to period-end
   tangible assets (2)      6.83 %     6.77 %     6.86 %               7.24 %     9.43 %     9.77 %     9.44 %
  Period-end tangible
   common shareholders'
   equity to period-end
   tangible assets (2)      6.71 %     6.65 %     6.73 %               6.15 %     7.10 %     7.35 %     6.91 %

  Average tangible
   equity to average
   tangible assets (2)      6.81 %     6.70 %     7.49 %    6.99 %     9.20 %     9.72 %     9.77 %     9.75 %    9.60 %
  Average tangible
   common shareholders'
   equity to average
   tangible assets (2)      6.69 %     6.58 %     6.68 %    6.65 %     6.96 %     7.33 %     7.30 %     7.14 %    7.18 %


  Senior Debt Credit
   Ratings
     For The Period
      Ended September                                     Standard
      30, 2010                                               &

                                     Moody's     Fitch     Poor's      DBRS
                                    ---------  ---------  --------  ---------
      City National
       Bank                         Aa3        A--        A--       A (high)
      City National
       Corporation                  A1         A--        BBB+      A


  (1) In accordance with applicable bank regulatory guidelines, the Company calculates risk-weighted assets by assigning
   assets and credit equivalent amounts of derivatives and off-balance sheet items to one of several broad risk
   categories according to the obligor, or, if relevant, the guarantor or the nature of the collateral. The aggregate
   dollar amount in each risk category is then mutlipled by the risk weight associated with that category. The resulting
   weighted values from each of the risk categories are added together for determining risk-weighted assets.
  (2) The Tier I common shareholders' equity to risk-weighted assets ratio, tangible equity to tangible assets ratio,
   and tangible common shareholders' equity to tangible assets ratio are non-GAAP financial measures. For notes on
   non-GAAP measures, see pages 13 and 14 of the Selected Financial Information.

  CITY NATIONAL
   CORPORATION
  NON-GAAP
   FINANCIAL
   MEASURES
  (unaudited)

  (a) Net income available to common
   shareholders, excluding unusual items

    A reconciliation of the GAAP to non-GAAP
     measure is set forth below:


                        Quarter Ending
                      September 30, 2010
                 ----------------------------

  (Dollars in
   millions,
   except per
   share
   amounts)      Amount         Per Share
  -------------  -------------  -------------
  Net income
   available to
   common
   shareholders         $ 34.4         $ 0.65
  After tax
   adjustments:
   Less: Gain
    on
    acquisition          (1.2)         (0.02)
   Add: Charge
    on early
    debt
    retirement             7.1           0.13
                 -------------  -------------
  Net income
   available to
   common
   shareholders
  , excluding
   unusual
   items                $ 40.3         $ 0.76
                 =============  =============

  Management believes this non-GAAP financial measure enhances the comparability of the financial results with prior
   periods as well as to highlight the effects of unusual items in the periods presented. The Company believes that
   investors may find it useful to see this non-GAAP financial measure to analyze the Company's underlying financial
   performance without the impact of unusual items.

  (b) Tier I common shareholders' equity to
   risk-based assets

    The Tier I common shareholders' equity to risk-based assets ratio, also known as Tier I common ratio, is calculated
     by dividing (a) Tier I capital less non-common components including qualifying perpetual preferred stock,
     qualifying noncontrolling interest in subsidiaries and qualifying trust preferred securities by (b) risk-weighted
     assets. Tier I capital and risk-weighted assets are calculated in accordance with applicable bank regulatory
     guidelines. This ratio is a non-GAAP measure that is used by investors, analysts and bank regulatory agencies to
     assess the capital position of financial services companies. Management reviews this measure in evaluating the
     Company's capital levels and has included these ratios in response to market participant interest in the Tier I
     common shareholders' equity to risk-based assets ratio.


                                    2010                                                 2009
                 -------------------------------------------  ----------------------------------------------------------
                     Third         Second          First         Fourth          Third         Second          First

  (Dollars in
   thousands)       Quarter        Quarter        Quarter        Quarter        Quarter        Quarter        Quarter
  -------------  -------------  -------------  -------------  -------------  -------------  -------------  -------------
  Tier I
   capital         $ 1,650,793    $ 1,614,341    $ 1,585,727    $ 1,760,136    $ 1,682,155    $ 1,714,912    $ 1,594,371
  Less:
   Preferred
   stock                    --             --             --      (196,048)      (391,593)      (391,091)      (390,590)
  Less:
   Noncontrolli
  ng interest         (25,189)       (25,088)       (25,088)       (26,339)       (24,748)       (25,387)       (25,441)
  Less: Trust
   preferred
   securities        (252,115)      (252,088)      (252,062)      (252,036)        (5,155)        (5,155)        (5,155)
                 -------------  -------------  -------------  -------------  -------------  -------------  -------------
   Tier I
    common
    shareholder
   s' equity
    (A)            $ 1,373,489    $ 1,337,165    $ 1,308,577    $ 1,285,713    $ 1,260,659    $ 1,293,279    $ 1,173,185

  Risk-weighted
   assets (B)     $ 13,788,060   $ 13,806,764   $ 13,856,028   $ 14,430,857   $ 13,669,051   $ 13,886,674   $ 13,618,545

  Tier I common
   shareholders
  ' equity to
   risk-based
   assets
   (A)/(B)              9.96 %         9.68 %         9.44 %         8.91 %         9.22 %         9.31 %         8.61 %

  (c) Noninterest income, excluding unusual
   items

    Noninterest income for the three-months ending September 30, 2010 was $66.8 million, a decrease of 3 percent
     compared to the three-months ending September 30, 2009. Noninterest income for the three-months ending September
     30, 2010, excluding the current quarter pretax gain on acquisition of $2.1 million and the $12.3 million pretax
     charge on early debt retirement, was $76.9 million, an increase of 12 percent compared to the three-months ending
     September 30, 2009.

    Management believes this non-GAAP financial measure enhances the comparability of the financial results with prior
     periods as well as to highlight the effects of unusual items in the periods presented. The Company believes that
     investors may find it useful to see this non-GAAP financial measure to analyze the Company's underlying financial
     performance without the impact of unusual items.

 CITY NATIONAL CORPORATION
 NON-GAAP FINANCIAL MEASURES
  (continued)
 (unaudit
 ed)

 (d) Pro-forma Tier I risk-based capital, excluding
  trust preferred securities

   Tier I risk-based capital was 11.97% as of September 30, 2010, and was calculated by dividing Tier I capital of $1.65 billion by risk
    weighted assets of $13.79 billion. Tier I capital and risk-weighted assets are calculated in accordance with applicable bank regulatory
    guidelines. Tier I risk-based capital, excluding trust preferred securities of $247.0 million and its related income statement impact of
    $6.8 million, was 10.13% at September 30, 2010, and was calculated by dividing adjusted Tier I capital of $1.40 billion by risk weighted
    assets of $13.79 billion.

   Management believes this non-GAAP financial measure highlights the effect of significant events on the Company's capital ratios. The
    Company believes that investors may find it useful to see this non-GAAP financial measure to analyze the Company's capital position.

 (e) Tangible equity and tangible common
  shareholders' equity ratios

   Tangible equity to tangible assets is a non-GAAP financial measure that represents total equity less identifiable intangible assets and
    goodwill divided by total assets less identifiable intangible assets and goodwill. Tangible common shareholders' equity to tangible
    assets is a non-GAAP financial measure that represents tangible equity less preferred stock and noncontrolling interest divided by total
    assets less identifiable intangible assets and goodwill. Management reviews both these measures in evaluating the Company's capital
    levels and has included these ratios in response to market participant interest in tangible equity and tangible common shareholders'
    equity as a measure of capital. A reconciliation of the GAAP to non-GAAP measure is set forth below:


                                    2010                                                             2009
         ------------------------------------------------------------------------------------------------------------------------------------
              Third        Second         First        Year To         Fourth         Third          Second         First         Year To

 (Dollars
  in
  thousan
 ds)        Quarter       Quarter       Quarter         Date          Quarter        Quarter        Quarter        Quarter         Date
 --------------------------------------------------------------------------------------------------------------------------------------------
 Period
  End:
  Total
   equity   $ 1,977,163   $ 1,926,960   $ 1,863,411                   $ 2,012,764    $ 2,218,492    $ 2,173,916    $ 2,049,370
  Less:
   Goodwi
  ll and
   other
   intang
  ibles       (522,592)     (524,820)     (523,135)                     (525,583)      (533,367)      (496,562)      (498,194)
         ------------------------------------------               ------------------------------------------------------------
   Tangib
   le
    equit
   y (A)      1,454,571     1,402,140     1,340,276                     1,487,181      1,685,125      1,677,354      1,551,176
  Less:
   Noncon
  trollin
  g
   intere
  st           (25,189)      (25,189)      (25,189)                      (26,441)       (24,849)       (25,387)       (25,441)
  Less:
   Prefer
  red
   stock             --            --            --                     (196,048)      (391,593)      (391,091)      (390,590)
         ------------------------------------------               ------------------------------------------------------------
   Tangib
   le
    commo
   n
    share
   holder
   s'
    equit
   y (B)    $ 1,429,382   $ 1,376,951   $ 1,315,087                   $ 1,264,692    $ 1,268,683    $ 1,260,876    $ 1,135,145

  Total
   assets  $ 21,823,616  $ 21,231,447  $ 20,066,475                  $ 21,078,757   $ 18,400,604   $ 17,660,785   $ 16,933,530
  Less:
   Goodwi
  ll and
   other
   intang
  ibles       (522,592)     (524,820)     (523,135)                     (525,583)      (533,367)      (496,562)      (498,194)
         ------------------------------------------               ------------------------------------------------------------
   Tangib
   le
    asset
   s (C)   $ 21,301,024  $ 20,706,627  $ 19,543,340                  $ 20,553,174   $ 17,867,237   $ 17,164,223   $ 16,435,336

  Period-
  end
   tangib
  le
   equity
   to
   period
  -end
   tangib
  le
   assets
   (A)/(C
  )               6.83%         6.77%         6.86%                         7.24%          9.43%          9.77%          9.44%
  Period-
  end
   tangib
  le
   common
   shareh
  olders'
   equity
   to
   period
  -end
   tangib
  le
   assets
   (B)/(C
  )               6.71%         6.65%         6.73%                         6.15%          7.10%          7.35%          6.91%

 Average
  Balance
 :
  Total
   equity   $ 1,960,206   $ 1,881,635   $ 2,003,150    $ 1,948,173    $ 2,240,642    $ 2,204,220    $ 2,145,859    $ 2,050,401    $ 2,160,922
  Less:
   Goodwi
  ll and
   other
   intang
  ibles       (523,855)     (522,311)     (524,838)      (523,664)      (533,314)      (510,514)      (497,487)      (499,229)      (510,230)
         ------------------------------------------------------------------------------------------------------------------------------------
   Tangib
   le
    equit
   y (D)      1,436,351     1,359,324     1,478,312      1,424,509      1,707,328      1,693,706      1,648,372      1,551,172      1,650,692
  Less:
   Noncon
  trollin
  g
   intere
  st           (25,189)      (25,189)      (26,427)       (25,597)       (24,815)       (25,369)       (25,438)       (25,441)       (25,264)
  Less:
   Prefer
  red
   stock             --            --     (132,915)       (43,818)      (389,688)      (391,353)      (390,838)      (390,348)      (390,557)
         ------------------------------------------------------------------------------------------------------------------------------------
   Tangib
   le
    commo
   n
    share
   holder
   s'
    equit
   y (E)    $ 1,411,162   $ 1,334,135   $ 1,318,970    $ 1,355,094    $ 1,292,825    $ 1,276,984    $ 1,232,096    $ 1,135,383    $ 1,234,871

  Total
   assets  $ 21,614,748  $ 20,799,187  $ 20,267,248   $ 20,898,664   $ 19,095,212   $ 17,938,231   $ 17,369,311   $ 16,411,240   $ 17,711,495
  Less:
   Goodwi
  ll and
   other
   intang
  ibles       (523,855)     (522,311)     (524,838)      (523,664)      (533,314)      (510,514)      (497,487)      (499,229)      (510,230)
         ------------------------------------------------------------------------------------------------------------------------------------
   Tangib
   le
    asset
   s (F)   $ 21,090,893  $ 20,276,876  $ 19,742,410   $ 20,375,000   $ 18,561,898   $ 17,427,717   $ 16,871,824   $ 15,912,011   $ 17,201,264

  Average
   tangib
  le
   equity
   to
   averag
  e
   tangib
  le
   assets
   (D)/(F
  )               6.81%         6.70%         7.49%          6.99%          9.20%          9.72%          9.77%          9.75%          9.60%
  Average
   tangib
  le
   common
   shareh
  olders'
   equity
   to
   averag
  e
   tangib
  le
   assets
   (E)/(F
  )               6.69%         6.58%         6.68%          6.65%          6.96%          7.33%          7.30%          7.14%          7.18%

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: City National Corporation

CONTACT: City National Corporation
Financial/Investors
Christopher J. Carey
310.888.6777
Chris.Carey@cnb.com
Media
Cary Walker
213.673.7615
Cary.Walker@cnb.com
Conference Call:
Today 2:00 p.m. PDT
(866) 393-6804
Conference ID: 11680865