• Industry leading franchise focused on high net worth clients, businesses
  and commercial segments in key U.S. markets
• Transaction enhances RBC’s U.S. presence and accelerates franchise
  growth
• Compelling strategic fit with RBC’s U.S. Wealth Management and Capital
  Markets businesses, creating a powerful expansion platform for
  long-term growth
• Offers attractive long-term earnings growth while maintaining strong
  capital position
• Expected to be accretive to earnings per share (before amortization of
  intangibles) in the latter part of year three and accretive to earnings
  in year two

TORONTO and LOS ANGELES, Jan. 22, 2015 /PRNewswire/ – Royal Bank of Canada (RY
on TSX and NYSE) (“RBC”) today announced that it has entered into a
merger agreement to acquire City National Corporation (CYN on NYSE)
(“City National”), a premier U.S. private and commercial bank serving
high net worth and commercial clients. RBC will pay, on average,
approximately US$47.25 in cash and 0.7489 of an RBC common share for
each share of City National common stock. City National stockholders
will be entitled to elect to receive the merger consideration in RBC
common shares or cash, subject to certain adjustments and limitations.
Based on the closing price on the New York Stock Exchange of RBC’s
common shares on January 21, 2015 of US$62.16, the total transaction
value is approximately US$5.4 billion or US$93.80 of value per share of
City National common stock as of announcement. The aggregate
consideration will be paid with approximately US$2.7 billion in cash
and approximately 44 million RBC common shares. This represents
approximately a 50 percent cash and 50 percent share mix as of
announcement. The total number of RBC common shares to be issued and
the amount of cash to be paid in the transaction are both fixed.

Headquartered in Los Angeles, City National serves high net worth and
commercial clients across a number of the largest and most attractive
U.S. metropolitan areas, including New York, Los Angeles, the San
Francisco Bay Area and Orange County. Founded in 1954, City National’s
commercial banking specialties include a market-leading position in the
entertainment industry and an emerging presence in the rapidly growing
technology and health care segments. City National has also been ranked
by Barron’s as one of America’s top 40 wealth managers for the last 14
years.

RBC has a strong presence in the U.S., with a top-10 investment bank,
the 8th largest wealth management firm, and a growing asset management
business. RBC has 8,000 employees across the U.S., including more than
3,000 in New York.

“In line with RBC’s strategic goals, we believe this combination creates
a powerful expansion platform for focused long-term growth in the
country which we view as our second home market. City National serves
high net worth and commercial client segments in select high-growth
markets, and represents a unique opportunity to complement and enhance
our existing U.S. businesses and product offering,” said Dave McKay,
President and CEO, RBC. “Like us, City National has a strong commitment
to client service and a prudent risk culture. RBC supports City
National’s community reinvestment program, and both RBC and City
National are committed to making a meaningful, positive difference in
the communities they serve. City National also has a strong leadership
team and its employees are focused on building deep, long-lasting
relationships with their clients.”

McKay continued: “City National’s private banking and wealth management
capabilities will enable us to offer a broader product suite to the
340,000 U.S. households served by our U.S. Wealth Management unit. It
also has industry specialties which complement our strong U.S. Capital
Markets franchise. Its leadership has a proven track record of strong
performance and we are confident this transaction will create
significant long-term value for RBC’s shareholders.”

Following the closing of this transaction, RBC will combine its U.S.
Wealth Management unit with City National, under the leadership of City
National Chairman and CEO Russell Goldsmith, with the combined unit
being reported as part of the global RBC Wealth Management segment.
Goldsmith has served as City National’s CEO since 1995, during which
time the company has grown significantly, both organically and through
acquisitions.

“We’re very enthused about merging with RBC,” Goldsmith said. “This
combination is a compelling opportunity. It will deliver significant
value to our shareholders along with the opportunity to participate in
the future growth of RBC. It will promote both continuity and growth,
enabling our outstanding team of colleagues to maintain and strengthen
City National’s value proposition. It will improve what we can do for
our clients and the communities we serve. My colleagues and I look
forward to joining forces with this company that has tremendous
financial strength and considerable resources and capabilities not only
in the United States but around the world.”

Each City National common stockholder will have the opportunity to elect
the type of consideration to be received for City National common
stock, subject to certain proration, equalization and adjustment
procedures set forth in the merger agreement. As a result of these
procedures, City National stockholder elections of either cash or
shares in the transaction may be adjusted at closing. The total value
of the consideration that City National common stockholders will
actually receive upon the closing of the transaction will be based in
part on the value of RBC common shares at closing, and the ultimate
exchange ratio for the share portion of the consideration will likely
fluctuate prior to closing of the transaction based on changes in RBC’s
common share price and the equalization process. As part of the
transaction, the Goldsmith family stockholders will receive RBC common
shares for the entirety of their stockholdings (approximately 13
percent) and have agreed to vote their City National stockholdings in
favour of the transaction and to hold at least 50 percent of the RBC
common shares received by them in the transaction until the third
anniversary of closing.

The transaction is expected to be accretive to earnings per share
(before amortization of intangibles) in the latter part of year three
and accretive to earnings in year two. Given RBC’s strong capital
position and anticipated internal capital generation it expects to
maintain its ongoing capital management program, and to maintain a
Common Equity Tier (CET) 1 ratio at closing broadly in line with its
current level. RBC’s CET 1 ratio was 9.9 percent as at October 31,
2014.

Closing is expected in the fourth calendar quarter of 2015 subject to
customary closing conditions, including receipt of required regulatory
approvals and the approval of City National’s common stockholders.

RBC Capital Markets, LLC and J.P. Morgan Securities LLC served as
financial advisors, and Sullivan & Cromwell LLP and Osler, Hoskin &
Harcourt LLP served as legal advisors to RBC in this transaction.

Conference Call
A conference call is scheduled to take place on January 22, 2015, at
8:30 a.m. (ET), followed by a brief question and answer period with
analysts. Presentation materials will be available on RBC’s Investor
Relations website, at www.rbc.com/investorrelations/acquisitions.

Interested parties can access this call live on a listen-only basis via
telephone using the following access numbers:

Local calls: 416-695-7806
North American toll-free: 1-888-789-9572

The passcode for access on all numbers is 2623792#. Please call between

8:20 a.m. and 8:30 a.m. (ET).

A recording of the conference call will be available after 10:30 a.m.
(ET) on January 22, 2015 until April 22, 2015 via telephone at:
905-694-9451 (locally) or 1-800-408-3053 (North American toll-free),
passcode 2726258#.

About RBC
Royal Bank of Canada is Canada’s largest bank, and one of the largest
banks in the world, based on market capitalization. We are one of North
America’s leading diversified financial services companies, and provide
personal and commercial banking, wealth management services, insurance,
investor services and capital markets products and services on a global
basis. We employ approximately 78,000 full- and part-time employees who
serve more than 16 million personal, business, public sector and
institutional clients through offices in Canada, the U.S. and 38 other
countries. For more information, please visit rbc.com.

RBC supports a broad range of community initiatives through donations,
sponsorships and employee volunteer activities. In 2014, we contributed
more than $111 million to causes worldwide, including donations and
community investments of more than $76 million and $35 million in
sponsorships.

About City National Corporation
City National Corporation (NYSE: CYN) has US$32 billion in assets. The
company’s wholly owned subsidiary, City National Bank, provides
banking, investment and trust services through 75 branches and offices,
including 16 full-service regional centers, in Southern California, the
San Francisco Bay Area, Orange County, Nevada, New York City, Nashville
and Atlanta. City National and its investment affiliates manage or
administer US$61 billion in client investment assets, including US$49
billion under direct management. For more information, please visit www.cnb.com.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this communication may be deemed to be
forward-looking statements under certain securities laws, including the
“safe harbor” provisions of the United States Private Securities
Litigation Reform Act of 1995 and any applicable Canadian securities
legislation. These forward-looking statements include, but are not
limited to, statements about the expected effects of the acquisition of
City National Corporation by Royal Bank of Canada, the expected timing
of the acquisition and other statements other than in relation to
historical facts. Forward-looking statements are typically identified
by words such as “believe”, “expect”, “foresee”, “forecast”,
“anticipate”, “intend”, “estimate”, “goal”, “plan” and “project” and
similar expressions of future or conditional verbs such as “will”,
“may”, “should”, “could”, or “would”.

By their very nature, forward-looking statements require us to make
assumptions and are subject to inherent risks and uncertainties, many
of which are outside the control of Royal Bank of Canada and City
National Corporation. Forward-looking statements speak only as of the
date they are made and, except as required by law, neither party
assumes an obligation to update the forward-looking statements
contained in this communication. Any annualized, pro forma, projected
and estimated numbers in this communication are used for illustrative
purposes only, are not forecasts and may not reflect actual results. We
caution readers not to place undue reliance on these statements as a
number of important factors could cause our actual results to differ
materially from the expectations expressed in such forward-looking
statements. These factors include, but are not limited to, the
possibility that the proposed transaction does not close when expected
or at all because required regulatory, shareholder or other approvals
are not received or other conditions to the closing are not satisfied
on a timely basis or at all, or that the anticipated benefits of the
transaction are not realized when expected or at all, including as a
result of the strength of the economy and competitive factors in the
areas where Royal Bank of Canada and City National Corporation do
business; the impact of changes in the laws and regulations regulating
financial services and enforcement thereof; the effects of competition
in the markets in which Royal Bank of Canada and City National
Corporation operate; judicial or regulatory judgments and legal
proceedings; Royal Bank of Canada’s ability to complete the acquisition
and integration of City National Corporation successfully; and other
factors that may affect future results of Royal Bank of Canada and City
National Corporation including timely development and introduction of
new products and services, Royal Bank of Canada’s ability to cross-sell
more products to customers and technological changes.

We caution that the foregoing list of important factors is not
exhaustive. Additional information about these and other factors can be
found in Royal Bank of Canada’s 2014 Annual Report on Form 40-F and
City National Corporation’s 2013 Annual Report on Form 10-K, each filed
with the U.S. Securities and Exchange Commission (the “SEC”) and
available at the SEC’s website (http://www.sec.gov). Royal Bank of
Canada’s material general economic assumptions underlying certain of
the forward-looking statements in this press release are set out in its
2014 Annual Report under the heading “Overview and Outlook – Economic
and market review outlook” and for each business segment under the
heading “Outlook and priorities”.

IMPORTANT ADDITIONAL INFORMATION
In connection with the proposed transaction, Royal Bank of Canada will
file with the SEC a Registration Statement on Form F-4 that will
include a Proxy Statement of City National Corporation and a Prospectus
of Royal Bank of Canada, as well as other relevant documents concerning
the proposed transaction. The proposed transaction involving Royal Bank
of Canada and City National Corporation will be submitted to City
National Corporation’s stockholders for their consideration. This
communication does not constitute an offer to sell or the solicitation
of an offer to buy any securities or a solicitation of any vote or
approval. STOCKHOLDERS OF CITY NATIONAL CORPORATION ARE URGED TO READ
THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING
THE TRANSACTION WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS
TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Stockholders will be able to obtain a free copy of the definitive proxy
statement/prospectus, as well as other filings containing information
about Royal Bank of Canada and City National Corporation, without
charge, at the SEC’s website (http://www.sec.gov). Copies of the proxy
statement/prospectus and the filings with the SEC that will be
incorporated by reference in the proxy statement/prospectus can also be
obtained, without charge, by directing a request to Royal Bank of
Canada, 200 Bay Street, 4th Floor, North Tower, Toronto, ON, M5J 2W7,
Attention: Investor Relations, 416-955-7802 or to City National
Corporation, Investor Relations, 555 South Flower Street, 9th Floor,
Los Angeles, CA 90071, 213-673-7615.

PARTICIPANTS IN THE SOLICITATION
Royal Bank of Canada, City National Corporation, their respective
directors and executive officers and other persons may be deemed to be
participants in the solicitation of proxies in respect of the proposed
transaction. Information regarding Royal Bank of Canada’s directors
and executive officers is available in its Annual Report on Form 40-F
for the year ended October 31, 2014, which was filed with the SEC on
December 3, 2014, and its notice of annual meeting and management proxy
circular for its 2014 annual meeting of common shareholders, which was
furnished to the SEC under cover of a Form 6-K filed with the SEC on
January 31, 2014. Information regarding City National Corporation’s
directors and executive officers is available in City National
Corporation’s proxy statement for its 2014 annual meeting filed on
Schedule 14A, which was filed with SEC on March 11, 2014. Other
information regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained in the proxy
statement/prospectus and other relevant materials filed with the SEC.
Free copies of this document may be obtained as described in the
preceding paragraph.

SOURCE RBC