Fee income from foreign exchange services and letters of credit totaled $9.6 million in the first quarter of 2013, up 9 percent from the first quarter of 2012, reflecting increased client activity and the addition of new relationships. Fee income was down 15 percent from the fourth quarter of 2012, which included unusually strong year-end foreign exchange activity.
Other income was $18.4 million in the first quarter of 2013, up 36 percent from the first quarter of 2012 but down 24 percent from the fourth quarter of 2012. The increase from the year-ago period was due largely to the First American acquisition, as well as higher gains on transfers of covered loans to OREO. The decrease from the fourth quarter of last year reflects reduced income from client swap transactions, lower distribution income from investments and lower lease residual income. This was partly offset by higher gains on transfers of covered loans to OREO.
City National's first-quarter 2013 noninterest expense amounted to $211.3 million, up 5 percent from the first quarter of 2012. Excluding the Rochdale and First American acquisitions, noninterest expense fell 2 percent from the first quarter of last year. 1Noninterest expense was down 5 percent from the fourth quarter of 2012. The decrease largely reflects lower legal and professional fees and OREO expense, which were partly offset by higher compensation costs, including seasonally higher payroll taxes. Fourth-quarter 2012 results included $4.7 million in legal and professional fees and charges related to the resolution of a legal claim. CREDIT QUALITY The following credit quality information excludes loans subject to loss-sharing agreements involving City National's FDIC-assisted transactions: Net recoveries in the first quarter of 2013 totaled $4.8 million, or 0.13 percent of total loans and leases on an annualized basis. The company realized net recoveries of $4.5 million, or 0.15 percent, in the first quarter of 2012 and net recoveries of $2.0 million, or 0.06 percent, in the fourth quarter of 2012.
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