BBCN Bancorp in Los Angeles reported a decline in quarterly earnings tied to higher expenses and a rise in loan payoffs.
The $6.9 billion asset company's third-quarter profit fell 10% from a year earlier, to $21.4 million. Earnings of 27 cents a share missed the average estimate of analysts polled by Bloomberg by 3 cents.
A 10% increase in operating costs, to $39.4 million, weighed down third-quarter profit. BBCN said in a press release Tuesday that the increased costs were tied to higher salaries and hiring designed "to support BBCN's growing franchise and strategic initiatives."
Loan growth was offset by a rise in payoffs, which jumped by 17%, to $312 million. Total loans increased 7%, to $5.4 billion. The net interest margin compressed by 27 basis points, to 4.15%, mainly from lower yields.
Fee-based revenue increased by 5%, to $11.4 million.
The lower profit comes as BBCN prepares to open an office in Seoul aimed at expanding business ties in South Korea. The office is expected to open by the end of this year, the company said in a press release Tuesday. "We believe our presence in South Korea will significantly enhance our ability to capture more business with Korean national companies with operations in the United States," Kevin Kim, BBCN's chairman and chief executive, said in the release.