Comerica Incorporated CMA reported upbeat earnings for the second quarter on Friday. The company posted quarterly earnings of $1.42 per share which beat the analyst consensus estimate of $1.26 per share. The company reported quarterly sales of $849.000 million which beat the analyst consensus estimate of $842.389 million. Comerica shares gained 4.7% to close at $65.32 on Friday. These analysts made changes to their price targets on Comerica following earnings announcement. Keefe, Bruyette & Woods analyst Ch ...

Core Insights - Comerica reported Q2 2025 earnings with an EPS of $1.42, reflecting a nearly 14% sequential increase, and returned $193 million to shareholders through stock repurchases and dividends [1] - The company highlighted loan growth, normalization of deposits, disciplined expense control, and strong capital position, maintaining a net interest income growth guidance of 5% to 7% for the year despite short-term challenges [1][9] Loan Growth and Business Momentum - Comerica achieved approximately 3% loan growth and increased total commitments by $400 million, with notable activity in environmental services and commercial real estate [2] - Management indicated improving middle market loan pipelines and a positive sentiment among customers, suggesting a potential recovery in business confidence [3] Deposit Stability and Technology Investments - Non-interest-bearing deposits remained stable at 38% of total deposits for four consecutive quarters, showcasing resilience amid sector challenges [4] - The launch of two new real-time payment solutions aims to enhance customer relationships and improve funding mix quality [5] Expense Management and Capital Strength - Non-interest expenses decreased by $23 million quarter-over-quarter, leading to an improved efficiency ratio, while the CET1 ratio stood at 11.94%, above the internal target [6] - The strong capital position allowed for increased share repurchases of $100 million in Q2, although efficiency metrics remain a concern for management [8] Future Outlook - Management forecasts average loans to be flat to down 1% in 2025, with average deposits expected to decline by 2% to 3% [9] - Net interest income is projected to grow by 5% to 7% for the year, with a slight dip anticipated in Q3 before resuming growth in Q4 [9]

Core Viewpoint - Comerica Incorporated (CMA) reported second-quarter 2025 adjusted earnings per share (EPS) of $1.42, exceeding the Zacks Consensus Estimate of $1.23, but down from $1.53 in the prior-year quarter [1][8] Financial Performance - Net income attributable to common shareholders was $187 million, a decline of 6.5% from the year-ago quarter [2] - Total quarterly revenues reached $849 million, up 3% year over year, surpassing the consensus estimate by 0.5% [3] - Net interest income (NII) increased by 7.9% year over year to $575 million, with the net interest margin rising 30 basis points to 3.16% [3] - Total non-interest income decreased by 5.8% year over year to $274 million [3] - Non-interest expenses totaled $561 million, up 1.1% year over year, primarily due to increased salaries and benefits and occupancy expenses [4] - The efficiency ratio improved to 65.78% from 67.77% in the prior-year quarter, indicating increased profitability [4] Loan and Deposit Trends - Total loans rose by 2.5% sequentially to $51.2 billion as of June 30, 2025 [5] - Total deposits declined by 2.4% from the previous quarter to $60 billion [5] Credit Quality - The company recorded a provision for credit loss of $44 million in the second quarter, compared to no provision in the year-ago quarter [6] - The allowance for credit losses increased by 2.5% year over year to $735 million [6] - Total non-performing assets rose by 10.2% year over year to $249 million [6] - The allowance for credit losses to total loans ratio was 1.44%, up from 1.38% a year ago [7] - Net charge-offs increased significantly to $28 million from $11 million in the prior-year quarter [7] Capital Position - The total capital ratio was 13.74%, down from 14.02% in the year-ago quarter [9] - The Common Equity Tier 1 capital ratio improved to 11.94% from 11.55% in the prior-year quarter [9] - The tangible common equity ratio was 8.04%, up from 6.49% in the prior-year quarter [9] Capital Distribution Activities - The company repurchased $100 million of common stock under the share repurchase program [10] Overall Assessment - The company's capital position is viewed positively, supporting future capital distribution activities and enhancing investor confidence [11] - Focus on improving operational efficiency is expected to bolster financials, although weak asset quality and rising expenses are noted as near-term concerns [11]

Core Insights - Comerica Incorporated (CMA) reported revenue of $849 million for the quarter ended June 2025, reflecting a 3% increase year-over-year, with EPS at $1.42, down from $1.53 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $844.72 million by 0.51%, while the EPS surpassed the consensus estimate of $1.23 by 15.45% [1] Financial Performance Metrics - Efficiency Ratio stood at 65.8%, better than the six-analyst average estimate of 70.1% [4] - Net interest margin was reported at 3.2%, slightly below the six-analyst average estimate of 3.3% [4] - Net charge-offs (recoveries) to average total loans were at 0.2%, matching the average estimate [4] - Average balance of total earning assets was $70.34 billion, close to the $70.4 billion average estimate [4] - Total nonperforming assets amounted to $249 million, significantly lower than the three-analyst average estimate of $306.34 million [4] - Total nonperforming loans were reported at $248 million, compared to the average estimate of $308.51 million [4] - Net interest income was $575 million, slightly below the average estimate of $576.45 million [4] - Total noninterest income reached $274 million, exceeding the six-analyst average estimate of $263.45 million [4] - Service charges on deposit accounts were $47 million, slightly above the average estimate of $46.96 million [4] - Commercial lending fees totaled $17 million, compared to the average estimate of $16.82 million [4] - Fiduciary income was reported at $57 million, above the average estimate of $54.69 million [4] - Letter of credit fees were $10 million, below the three-analyst average estimate of $11.94 million [4] Stock Performance - Comerica's shares have returned +11.8% over the past month, outperforming the Zacks S&P 500 composite's +5.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company reported earnings per share of $1.42, representing an almost 14% increase over the prior quarter [8] - Net interest income remained stable at $575 million for the third consecutive quarter, with robust loan growth offsetting the impact of deposits [14] - Capitalization strength was highlighted with an estimated CET1 ratio of 11.94%, well above the strategic target of 10% [7][19] Business Line Data and Key Metrics Changes - Average loans increased by almost 1% and period-end loans rose approximately 3%, driven by new loan production for new and existing customers [10] - Non-interest income increased by $20 million, with growth across most customer line items due to higher loan volumes and seasonal benefits [15][16] - Expenses decreased by $23 million over the prior quarter, largely due to lower litigation-related expenses and seasonal declines in incentive compensation [17] Market Data and Key Metrics Changes - Average deposits declined just over 1%, with the largest decreases in retail, corporate banking, and technology and life sciences [11] - Non-interest bearing deposits as a percentage of total deposits remained flat at 38% for the fourth consecutive quarter, indicating stability in the funding mix [11] - The company expects full-year average deposits to decline by 2% to 3% in 2025, with a deliberate reduction in brokered CDs [20] Company Strategy and Development Direction - The company is focused on strategic investments in small business, middle market, business banking, and payments to drive responsible growth [28] - The management emphasized the importance of maintaining a conservative approach to capital while supporting customer growth and driving favorable returns over time [25][26] - The company plans to continue share repurchases, with an intention to repurchase approximately $100 million of common stock in the third quarter [25] Management's Comments on Operating Environment and Future Outlook - Management noted that while economic and geopolitical uncertainty persists, customers appear more confident in navigating the environment and making investments [7] - The outlook for 2025 includes projected net interest income growth of 5% to 7%, with loan trends outperforming expectations [21] - Management acknowledged the potential for upward pressure on deposit pricing as they fund robust loan growth [22] Other Important Information - The company announced new capabilities and product enhancements in payments and deposits, indicating a commitment to innovation [7] - Management expressed a cautious but optimistic view on the economic environment, with expectations for continued loan growth and improved customer confidence [20][27] Q&A Session Summary Question: NII trajectory and expectations for Q3 and Q4 - Management expects a slight decrease in net interest income (NII) in Q3, followed by an upward trajectory in Q4, driven by strong loan growth and deposit increases [32][33] Question: Expense guidance for Q3 and Q4 - Management acknowledged a projected increase in expenses for Q3, attributing it to deferred project expenses and seasonal factors [42][43] Question: Loan growth potential and pipeline activity - Management indicated improved pipeline activity and loan growth, with positive momentum expected to continue in the second half of the year [49][50] Question: Conditions for remaining independent - Management emphasized the importance of performance relative to peers and the need to protect the company while pursuing growth opportunities [81][86] Question: Impact of potential mergers on strategy - Management noted that while they had previously anticipated limited mergers, recent market conditions may lead to increased M&A activity [88] Question: Credit quality and criticized loans - Management reported a moderate increase in criticized loans, primarily concentrated in three credits with consumer components, but overall credit quality remains stable [108][109]

Financial Data and Key Metrics Changes - The company reported earnings per share of $1.42, representing an almost 14% increase over the prior quarter [7] - Net interest income remained stable at $575 million for the third consecutive quarter, with a modest two basis point reduction in net interest margin [14] - Capitalization strength was highlighted with an estimated CET1 of 11.94%, well above the 10% strategic target [6][18] Business Line Data and Key Metrics Changes - Average loans increased almost 1% and period-end loans rose approximately 3%, driven by new loan production for new and existing customers [9] - Non-interest income increased by $20 million, with growth across most customer line items due to higher loan volumes and seasonal benefits [15] - Expenses decreased by $23 million over the prior quarter, largely due to lower litigation-related expenses and salaries [16] Market Data and Key Metrics Changes - Average deposits declined just over 1%, with the largest decreases in retail, corporate banking, and technology and life sciences [11] - Non-interest bearing deposits as a percentage of total deposits remained flat at 38% for the fourth consecutive quarter, indicating stability in the funding mix [12] - The company expects full-year average deposits to decline by 2% to 3% in 2025, with a moderate increase in the third quarter balances anticipated [19] Company Strategy and Development Direction - The company is focused on strategic investments in small business, middle market, business banking, and payments to drive responsible growth [26] - The management emphasized the importance of maintaining a conservative approach to capital while supporting customer needs and driving growth [24] - The company plans to continue share repurchases and monitor the economic environment and regulatory landscape for future capital decisions [23] Management's Comments on Operating Environment and Future Outlook - Management noted that while economic and geopolitical uncertainty persists, customers appear more confident in navigating the environment and making investments [6] - The outlook for 2025 includes projected net interest income growth of 5% to 7%, with loan trends outperforming expectations [20] - Management acknowledged the challenges in deposit pricing and anticipated upward pressure as they fund robust loan growth [21] Other Important Information - The company redeemed preferred stock, which, while beneficial for EPS, created a slight drag on net interest income due to the cash used for redemption [18] - The management expressed commitment to driving efficiency while balancing long-term growth and return objectives [22] Q&A Session Summary Question: Can you provide more color on the NII trajectory? - Management expects a slight decrease in NII in Q3 before an upward trajectory in Q4, driven by strong loan growth and deposit increases [30][31] Question: What are the expectations for expenses in Q3 and Q4? - Management indicated that expenses are expected to step up due to deferred project expenses and seasonal factors, with notable items not repeating [41][42] Question: Can you quantify the improvement in pipelines and activity? - Management noted an improvement in loan growth and positive momentum in pipelines, although quantifying it remains challenging [47][48] Question: What conditions would indicate that Comerica has not earned the right to remain independent? - Management emphasized the need to perform at an acceptable level and acknowledged the importance of protecting the company and serving clients [80][82] Question: How does the company view potential mergers and acquisitions? - Management stated that the $100 billion asset threshold is not a governor for pursuing transactions, focusing instead on organic growth opportunities [68][69] Question: What are the expectations for deposit pricing and repricing opportunities? - Management acknowledged the competitive environment for deposits and indicated that they are closely monitoring pricing strategies [100][101] Question: Can you provide more color on the increase in criticized loans? - Management described the increase as moderate, concentrated in three credits with consumer components under pressure from higher rates [103][105]

Core Viewpoint - Comerica Incorporated (CMA) reported quarterly earnings of $1.42 per share, exceeding the Zacks Consensus Estimate of $1.23 per share, but down from $1.53 per share a year ago, indicating an earnings surprise of +15.45% [1][2] Financial Performance - The company posted revenues of $849 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.51% and up from $824 million year-over-year [2] - Over the last four quarters, Comerica has exceeded consensus EPS estimates three times and has topped consensus revenue estimates three times as well [2] Stock Performance and Outlook - Comerica shares have increased by approximately 0.9% since the beginning of the year, while the S&P 500 has gained 7.1% [3] - The company's current consensus EPS estimate for the upcoming quarter is $1.32 on revenues of $856.2 million, and for the current fiscal year, it is $5.08 on revenues of $3.39 billion [7] Industry Context - The Zacks Industry Rank for Banks - Major Regional is currently in the top 7% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment [5]

Comerica Incorporated Second Quarter 2025 Financial Review July 18, 2025 Safe Harbor Statement This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "achieve," "anticipate," "assume," "believe," "could," "deliver," "drive," "enhance," "estimate," "expect," "focus," "future," "goal," "grow," "guidance," "intend," "may," "might," "plan," " ...

Core Viewpoint - Comerica Incorporated has reported its second quarter 2025 financial results, which are accessible on its Investor Relations website [1][2]. Financial Results - The financial results and earnings presentation will be filed on Form 8-K and available on the SEC website [1]. - A conference call to review the second quarter 2025 financial results is scheduled for July 18, 2025, at 7 a.m. CT / 8 a.m. ET [2]. Company Overview - Comerica is a financial services company headquartered in Dallas, Texas, and operates through three business segments: The Commercial Bank, The Retail Bank, and Wealth Management [2]. - As one of the 25 largest commercial U.S. financial holding companies, Comerica focuses on building relationships to support the success of individuals and businesses [2]. - The company reported total assets of $78.0 billion as of June 30, 2025 [2].

SECOND QUARTER 2025 NET INCOME OF $199 MILLION, $1.42 PER SHARE Broad-based Loan Growth and Continued Strong Capitalization Favorable Expense and Fee Income Trends Drove Higher Profitability "Today we reported second quarter net income of $199 million, representing a 16% increase over the prior quarter," said Curtis C. Farmer, Comerica Chairman and Chief Executive Officer. "Improved customer sentiment contributed to broad- based loan growth, offsetting modest deposit pressures and keeping net interest incom ...