PacWest Bancorp, the parent of Pacific Western Bank in Los Angeles, reported earnings of $85.1 million in the second quarter, up 16% from the prior quarter. Its profits were up more than 700% from a year earlier, when earnings were lowered by costs related to its acquisition of CapitalSource.

Its earnings per share of 70 cents beat the average estimate of analysts polled by Bloomberg by three cents.

The $16.7 billion-asset company said that its net interest income after a provision for loan losses climbed 7.3% from the prior quarter, to $196 million. Loan growth accounted for some of the increase, but it was improved credit quality that largely drove the results. PacWest reduced its loan-loss provision by 60% from the prior quarter as delinquencies on energy-related loans abated. Overall, nonaccruals fell nearly 16% from the first quarter, to $137 million.

Year over year, net interest income after provisioning for loan losses increased 4.5%, thanks largely to a surge in loan balances. Loans at June 30 totaled $12.1 billion, up 15% from a year earlier.

Noninterest income increased by about 130%, to $19.6 million, year over year, thanks to higher volume in commissions and fees, decreases to Federal Deposit Insurance Corp. loss-sharing expenses, and a marked increase in dividends and realized gains on equity investments. Compared to the prior quarter, however, noninterest income fell 6% due to sharply lower gains on sales of loans and securities.

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