Banco Bilbao Vizcaya Argentaria SA reported Wednesday that profits in its U.S. operations rose in the second quarter as problem loans eased slightly.

The Madrid company said earnings in the U.S. rose 36.9% from the first quarter and 2.7% from a year earlier, to $105 million. Year-over-year comparisons were influenced by the company's government-assisted purchase of Guaranty Bank in August.

The U.S. unit's ratio of nonperforming assets to total loans edged down to 4.3% during the second quarter, compared with 4.4% in the first quarter. Its balance sheet shrunk: loan balances were down 2.8% from a quarter earlier and deposits fell 21%.

The $91.6 billion-asset U.S. unit produced gains in residential mortgages while indirect auto, student, credit card and developer loans declined, BBVA said in a news release. Deposits fell "due mainly to the difficulty in making them profitable in a scenario of low interest rates and greater regulatory capital requirements," the company said.

The bulk of BBVA's operations in the U.S. came from its 2007 acquisition of Compass Bancshares Inc. in Birmingham, Ala.

BBVA's earnings overall rose 3.8% from the first quarter but fell 17.5% from a year earlier, to $1.67 billion.

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.