Umpqua Holdings' second-quarter profit surpassed Wall Street expectations, which exclude costs tied to the Portland, Ore., companys purchase of Sterling Financial.
The $22 billion-asset company's net income fell 34%, to $17.2 million.
Operating earnings, which excludes costs tied to the companys April purchase of the $10 billion-asset Sterling Financial, were $53.9 million. Operating earnings of 27 cents a share were 3 cents higher than the average estimate of analysts polled by Bloomberg.
A steep rise operating costs contributed to the lower net income. Noninterest expenses more than doubled, to $214 million. Umpqua attributed the spike to the Sterling acquisition.
"We remain on track with the integration, and believe we are well-positioned to leverage the franchise value of the combined company to drive future growth," Ray Davis, Umpqua's president and chief executive, said in a press release Wednesday.
Income from loans increased, but not enough to offset the expense hike. Net interest income rose 126%, to $212 million. Total loans more than doubled after the acquisition, to $14.8 billion. The net interest margin expanded by 128 basis points, to 4.85%.
Umpqua increased its loan-loss provision more than fivefold, to $15.3 million. Net chargeoffs more than doubled, to $4.3 million.
Noninterest income rose 29%, to $44.5 million.