PacWest Bancorp in Los Angeles reported a double-digit increase in its quarterly earnings, driven by revenue gains and other factors.
Meanwhile, the $22 billion-asset company expects to complete its acquisition of CU Bancorp in the fourth quarter, President and CEO Matt Wagner said in a press release Tuesday on PacWest’s second-quarter results.
PacWest earned $93.6 million in the quarter, a 14% increase from a year earlier. Earnings per share were 77 cents, or 6 cents higher than analysts’ consensus compiled by FactSet Research Systems.
In the release, Wagner touted the company’s return on assets of 1.71% and a return on tangible equity of 16.06%.
A surge in revenue contributed to the strong quarterly results.
Noninterest income increased 59.5% to $35.3 million, as the second quarter of 2016 included $6.5 million in Federal Deposit Insurance Corp. loss-sharing expenses. Leased equipment income rose by 36.5%.
Gains on sale of securities more than tripled $1.7 million; and gains on sales of loans and leases increased 67% to $649,000 as the company said it sold or contracted to sell $221 million of loans, including $159.4 million of health care cash-flow loans.
“As a result, out health care cash-flow loan portfolio today includes only one non-pass-rated loan,” Wagner said.
Net interest income rose 3.7% to $242.5 million, as total loans and leases held for investment rose 6% to $15.5 billion and the net interest margin shrank by 12 basis points to 5.21%.
Noninterest expenses fell nearly 1% to $117.7 million. They included a $1.1 million charge related to the sale of the unfunded commitments portion of the health care loan sale, as well as $1.2 million in acquisition, integration and reorganization costs.
PacWest announced in April that it had agreed to buy CU Bancorp, the parent of California United Bank, for $705 million. PacWest is working with the $3 billion-asset CU Bancorp on the integration plan, according to the release.
“We expect regulatory and shareholder approvals to come in the normal course,” Wagner said in reference to the deal.