Rising interest rates and fee income softened the blow of tax charges in the fourth quarter for BBVA Compass Bancshares in Birmingham, Ala.
Net income for the $86.9 billion BBVA totaled $52 million in the fourth quarter, representing a 42% decline from the same period in 2016. BBVA’s fourth-quarter earnings included a $121 million tax charge related to its revaluation of net deferred tax assets.
"While the change in tax law required a revaluation of our net deferred tax assets, underlying trends in all of our businesses were very positive in the quarter,” President and CEO Onur Genç said in a press release. “Revenue growth was robust and well-balanced as both net interest income and noninterest income posted double-digit gains over the year ago quarter."
Total revenue increased 14% to $901 million in the fourth quarter. Net interest income rose 14% to $603.5 million. The net interest margin expanded 44 basis points to 3.22%.
Total loans ticked up 1% to $61.2 billion in the fourth quarter. In BBVA's earnings announcement, Genç said the commercial loan pipeline was strong and that BBVA was continuing to build out its digital consumer loan offerings.
Deposits remained flat at $68 billion.
Noninterest income increased 14% to $297.2 million. BBVA said it benefited from increases in corporate and correspondent investment sales, investment banking and advisory fees, retail investment sales and other income during the fourth quarter.
Noninterest expenses increased 11% to $615.8 million.
BBVA charged off $65.2 million, compared with $61.4 million in the fourth quarter of 2016. Nonperforming loans totaled 1.16% of total loans, versus 1.63% a year earlier.