Orange County
		Population 2,761,000 Average Household Income $82,573 Number of Businesses 135,566 Major Industries: Business Services, Technology, Construction, Tourism, Health Services, Education

A Record of Consistent Growrth

The City National Difference -- and the remarkable growth of the California economy -- has produced consistent and positive results for our shareholders. In the five-year period ended in 2000, we delivered a compounded annual growth rate for net income of 22% and total revenue of 21%. On a cash basis -- which excludes the non-cash accounting charges that primarily result from acquisitions -- we grew net income at a compounded annual rate of 24% over the past five years. We also achieved compound annual growth rates of 17% for assets, 23% for loans and 18% for deposits.

One of our key long-term priorities is to grow noninterest income, which is more recurring, more stable and less subject to credit risk than interest income. Noninterest income has more than tripled since 1995 -- from $35 million to $109 million -- driven in part by fees for services such as foreign exchange and cash management, and the growth in our assets under administration, which have almost tripled since 1995. Our assets under management -- which tend to produce higher fees and a deeper level of professional involvement with our clients -- grew from $800 million in 1995 to more than $6.7 billion at year-end.

During 2000, we added $1.1 billion in assets under management -- and brought to City National a respected and successful investment management team -- with the acquisition of Los Angeles-based Reed, Conner & Birdwell. This value-oriented asset management firm, still led by the professionals who built it, operates as an independent subsidiary of City National. We believe Reed, Conner & Birdwell will enhance our ability to provide our clients with outstanding and diversified investment management and, in turn, gather more investment assets for them and for City National Investments. We are very encouraged by the initial success of this new relationship and intend to selectively consider other comparable opportunities within California.