Loan growth was weak at BBVA Compass in Birmingham, Ala., in the third quarter, but wider margins and stronger fee income bolstered the bottom line.
The $87.3 billion-asset company reported net income of $130 million in the third quarter, up 8% from the same time last year.
“Revenue growth was solid,” President and CEO Onur Genç said in a press release Friday. “While we did incur higher provision expense as a result of the hurricanes, underlying trends in our loan portfolio resulted in a significant improvement in many of our key credit quality measures.”
The provision for loan losses was $103.4 million in the third quarter, up about 59% from a year earlier. The new figure included a $60 million pretax provision expense related to Hurricanes Harvey and Irma. The bank has 649 branches in seven states, including Texas and Florida.
Total revenues increased 8% to $844 million. Net interest income increased 14% to $589.4 million, driven by higher short-term interest rates. The net interest margin expanded 51 basis points to 3.13%.
Yet average total loans declined 1% to $60.3 billion. Nonperforming loans totaled 1.18% of total loans in the third quarter, down from 1.91% in the same period last year.
Average total deposits declined 4% to $65.6 billion.
Noninterest income increased 3% to $255 million. BBVA saw increases in asset management fees, service charges on deposit accounts and card and merchant processing fees, but said those increases were offset by declines in other interest-rate-sensitive fee businesses. Mortgage banking income, for instance, declined 58% to $3.5 million.
Noninterest expenses increased 3% to $574 million. BBVA said that third-quarter expenses also included about $4 million spent on repairs of property damage, relief efforts and commitments to employees and charitable organizations in the aftermath of Harvey and Irma.