Expenses weighed on UnionBanCal in San Francisco in the fourth quarter.
Earnings at the $97 billion-asset company, which is wholly owned by Bank of Tokyo Mitsubishi UFJ Financial Group, fell 4.7% from a year earlier, to $123 million.
Noninterest expense rose 15.5% from a year earlier, to $715 million, because of costs in connection with UnionBanCal's purchase in December of Pacific Capital Bancorp of Santa Barbara, and outlays for professional services.
Net interest income rose 4.4% from the fourth quarter of 2011, to $668 million, because of an increase in loans held for investment. Net interest margin tightened six basis points year over year, to 3.23%.
Noninterest income rose 46.3%, to $221 million, primarily because of gains on the sale of securities.
The company's efficiency ratio worsened to 70.29% on an adjusted basis from 69.12% in the fourth quarter of 2011.
UnionBanCal's loan book rose 9.4% from a year earlier to $57.2 billion. The allowance for loan losses fell 14.5%, to $653 million.