CITY NATIONAL CORP | 2013 | FY | 3

Note 6. Other Investments

FHLB and FRB Stock

        The Company's investment in stock issued by the FHLB and FRB totaled $64.4 million and $90.0 million at December 31, 2013 and December 31, 2012, respectively. Ownership of government agency securities is restricted to member banks, and the securities do not have readily determinable market values. The Company records investments in FHLB and FRB stock at cost in Other assets of the consolidated balance sheets and evaluates these investments for impairment. The Company expects to recover the full amount invested in FHLB and FRB stock.

Private Equity and Alternative Investments

        The Company has ownership interests in a limited number of private equity, venture capital, real estate and hedge funds that are not publicly traded and do not have readily determinable fair values. These investments are carried at cost in the Other assets section of the consolidated balance sheets and are net of impairment write-downs, if applicable. The Company's investments in these funds totaled $34.0 million at December 31, 2013 and $36.1 million at December 31, 2012. A summary of investments by fund type is provided below:

 
   December 31,  
(in thousands)
Fund Type
  2013   2012  

Private equity and venture capital

   $ 20,298   $ 20,693  

Real estate

     7,646     9,223  

Hedge

     2,733     2,866  

Other

     3,275     3,309  
           
​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 33,952   $ 36,091  
           
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
           

        Management reviews these investments quarterly for impairment. The impairment assessment includes a review of the most recent financial statements and investment reports for each fund and discussions with fund management. An impairment loss is recognized if the Company does not expect to recover the cost of an investment. The impairment loss is recognized in Other noninterest income in the consolidated statements of income. The new cost basis of the investment is not adjusted for subsequent recoveries in value. The Company recognized impairment losses totaling $0.5 million, $3.3 million and $1.2 million on its other investments during 2013, 2012 and 2011, respectively.

        The table below provides information as of December 31, 2013 on private equity and alternative investments measured at fair value on a nonrecurring basis due to the recognition of impairment:

(in thousands)
Fund Type
  Fair
Value		   Unfunded
Commitments		   Redemption
Frequency		   Redemption
Notice
Period

Private equity and venture capital (1)

   $ 662   $ 179   None (2)   N/A

Hedge (3)

     233     —   None (2)   N/A
                 
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 895   $ 179        
                 
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                 
(1)
Funds invest in securities and other instruments of public and private companies, including corporations, partnerships, limited liability companies and joint ventures.

(2)
Funds make periodic distributions of income but do not permit redemptions prior to the end of the investment term.

(3)
Fund invests in other hedge funds. Fund is being liquidated and capital returned to investors as the underlying investments are sold or redeemed.

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