PacWest Bancorp in Los Angeles reported higher third-quarter profits thanks to higher net interest income, increased commissions and fees and the elimination of its loss-sharing agreements.

The $21.3 billion-asset company said in a press release Tuesday that quarterly net earnings increased 34.7% from a year earlier to $93.9 million. At 77 cents per share, the earnings beat the consensus of analysts' estimates by a penny.

Net interest income climbed 21.8% to $234.6 million from a year earlier. Much of the increase can be attributed to the acquisition of the $3.1 billion-asset Square 1 Financial, which closed in the fourth quarter of 2015.

The company reported $14.7 billion in total loans, up 0.69% from the previous quarter. The company originated roughly $1.01 billion in loans in the quarter, however that was largely offset by $932 million in repayments.

"Third quarter loan growth fell below expectations due largely to dramatically higher prepayments in our health care real estate portfolio, said Pat Rusnak, chief financial officer of the company, in a press release. "The solid originations from other lending groups, in particular venture banking and construction, give us confidence that future-period loan growth will return to more normalized levels."

The company's provision for credit losses was $8.4 million, down 3.4% from a year earlier and down 39% from the second quarter. Nonaccrual loans as a percentage of total loans increased 28 basis points from the second quarter to 1.16%. The company said the increase was largely attributed to one $50 million health care real estate loan secured by a continuing care retirement facility.

Non-interest income jumped 71.3% to $26.9 million based primarily on commissions and fees that include service charges on deposits, as well as leased equipment income. The company also attributed the spike in part to the exit from loss-share agreements with the Federal Deposit Insurance Corp. related to its acquisitions of failed banks. The company settled with the FDIC in May. The agreements showed up as a $6.5 million hit to fee income in the second quarter and $4.45 million in the third quarter.

Non-interest expenses rose 22.8% to $110.7 million mainly because of compensation and occupancy costs.

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