(Left to right) City National Corporation Officers George H. Benter, Jr., President; Frank P. Pekny, Executive Vice President and CFO; Russell Goldsmith, Vice Chairman and CEO; Bram Goldsmith, Chairman

To Our Shareholders

In 2000, City National achieved its fifth consecutive year of record earnings -- our net income rose to $131.7 million -- and its sixth consecutive year of double-digit year-over-year earnings growth, with a gain of 22%. For the first time, City National's assets exceeded $9 billion, deposits reached $7.4 billion, loans were $6.5 billion and assets under administration or management were over $18 billion.

We entered the dynamic Northern California market with our acquisition of The Pacific Bank, N.A. and we completed our first acquisition of an independent asset management firm: Reed, Conner & Birdwell, Inc. We completed a five-year program that, for the first time, has established nine full-service regional banking centers and 48 banking offices from San Diego to San Francisco. And we added important new products, colleagues and services. We have thus achieved a critical mass of people, facilities and capabilities to effectively serve California's most attractive markets and continue to build on our relationships with many of California's affluent individuals, entrepreneurs, professionals, investors and small- to mid-sized businesses.

All these actions together allowed City National to continue to enhance its position as California's Premier Private and Business Bank^SM -- and as the second-largest independent bank headquartered in California.

We remain focused on California, the world's sixth-largest economy, with a $1.1 trillion gross domestic product. We enjoy an economic landscape with tremendous strengths and opportunities, despite some short-term uncertainties.

City National maintains a disciplined approach to credit quality and takes care to maintain adequate allowances. Further, we apply our technology, innovation and management skill to control expenses, raise productivity and sustain a strong balance sheet. We pursue California's many growth opportunities with investments in our people, products, solutions and services.