At September 30, 2013, City National's allowance for loan and lease losses totaled $295.9 million, or 1.79 percent of total loans and leases. That compares with $268.4 million, or 1.96 percent, at September 30, 2012 and $289.9 million, or 1.83 percent, at the end of the second quarter of 2013. The company also maintains an additional $25.9 million in reserves for off-balance-sheet credit commitments.

Commercial Loans

Commercial loan net recoveries were $4.4 million in the third quarter of 2013. This compares to net charge-offs of $4.9 million in the year-earlier period and net recoveries of $2.9 million in the second quarter of 2013. Net recoveries in the first nine months of 2013 amounted to $9.4 million, compared to net recoveries of $8.4 million in same period of last year.

Commercial loans on nonaccrual totaled $10.1 million in the third quarter of 2013, compared to $18.8 million at September 30, 2012 and $11.7 million at June 30, 2013.

Real Estate Construction Loans

City National's $240.0 million commercial real estate construction portfolio includes secured loans to developers of residential and nonresidential properties. This portfolio represents less than 2 percent of the company's total loans.

Third-quarter net recoveries of construction loans were $2.9 million, compared to net recoveries of $3.1 million in the third quarter of 2012 and net recoveries of $2.7 million in the second quarter of 2013. Net recoveries amounted to $8.3 million in the first nine months of 2013, compared with net charge-offs of $1.6 million in the same period of last year.

At September 30, 2013, construction loans on nonaccrual totaled $25.5 million, compared to $29.0 million at September 30, 2012 and $25.7 million at June 30, 2013.

Commercial Real Estate Mortgage Loans

Third-quarter net charge-offs in the company's $3.2 billion commercial real estate mortgage portfolio were $0.6 million compared to net charge-offs of $0.2 million in the third quarter of 2012 and net recoveries of $1.0 million in the second quarter of 2013. Net recoveries amounted to $0.5 million in the first nine months of 2013, compared with net recoveries of $0.2 million in the same period of last year.

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