East West Bancorp in Los Angeles reported higher quarterly profit that reflected balance sheet growth and lower taxes.
The $33 billion-asset company said in a press release Wednesday that its third-quarter net income rose 17% from a year earlier, to $110 million, or 76 cents a share.
Net interest income rose 6% to $254 million. Total loans increased 12% to $24.5 billion, while the net interest margin narrowed by 6 basis points to 3.26%. Loan growth occurred across most sectors.
Noninterest income decreased by 9% to $49 million. Core fees increased; the decline reflected a $17 million gain from year earlier tied to securities gains.
Noninterest expense rose by 15% to $170 million. Amortization of tax credit and other investments more than doubled to $32.6 million. Legal expenses also increased; the company has been working through a regulatory order tied to anti-money-laundering compliance.
The company's loan-loss provision increased by 37% to $11.5 million.
Net chargeoffs totaled $22.5 million, representing a significant increase from $5.2 million a year earlier. East West said that three "larger commercial loans" accounted for $21 million of the chargeoffs, noting that the loans were in "unrelated industries and were placed on nonaccrual status a year ago."
Income tax expense totaled $13.3 million, compared to nearly $45 million a year earlier.