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
“We expect regulatory and shareholder approvals to come in the normal course,” Wagner said in reference to the deal.
