BBVA Compass in Houston reported a drop in second-quarter earnings, partly because of a larger loan-loss provision.

The $76 billion-asset bank, a unit of the Spanish company Banco Bilbao Vizcaya Argentaria, reported Wednesday that income totaled $107.6 million, or 16% lower than a year ago.

A sharp jump in the bank's set-aside for problem loans drove the decline. The provision for loan losses increased 87%, to $45.3 million. Net charge-offs fell 56%, to $32.8 million.

Lower loan yields also dragged down profits. Net interest income declined 2%, to $498.8 million. At the same time, total loans increased 15%, to $53.9 billion.

Noninterest income increased slightly, but not enough to offset the higher provision. Revenue from fees and service charges increased 3%, to $214 million.

Operating expenses declined 2%, to $545.3 million.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.