Comerica(US:CMA)2025-04-30 20:21Financial Performance - Net income for Q1 2025 was $172 million, an increase of $2 million from $170 million in Q4 2024, driven by higher noninterest income and lower noninterest expenses [143]. - Diluted earnings per share rose to $1.25 in Q1 2025 from $1.22 in Q4 2024, reflecting an increase of $0.03 per share [143]. - Net income rose by $34 million to $172 million for the three months ended March 31, 2025, compared to $138 million for the same period in 2024, driven by higher net interest income and lower noninterest expenses [158]. - Noninterest income rose to $254 million in Q1 2025, compared to $250 million in Q4 2024, reflecting improved performance in various segments [143]. - Noninterest income increased by $18 million to $254 million for the three months ended March 31, 2025, compared to $236 million for the same period in 2024 [168]. Interest Income and Expenses - Net interest income remained stable at $575 million for both Q1 2025 and Q4 2024, while net interest margin increased by 12 basis points to 3.18% [149]. - Net interest income increased by $27 million to $575 million for the three months ended March 31, 2025, compared to $548 million for the same period in 2024 [165]. - The average rate on total earning assets was 5.11% in Q1 2025, slightly down from 5.15% in Q4 2024 [144]. - The average rate on commercial loans increased to 5.72% for the three months ended March 31, 2025, compared to 5.30% for the same period in 2024 [160]. Credit Quality - Provision for credit losses decreased to $20 million in Q1 2025 from $21 million in Q4 2024, with the allowance for credit losses at 1.44% of total loans for both periods [151]. - The provision for credit losses increased by $6 million to $20 million for the three months ended March 31, 2025, reflecting changes in the loan portfolio and economic uncertainty [166]. - Net loan charge-offs increased to $26 million in Q1 2025, up from $16 million in Q4 2024, primarily due to increases in Commercial Real Estate and Corporate Banking [152]. - The Corporation's net charge-offs increased by $12 million to $26 million, driven by Commercial Real Estate, Entertainment, and Corporate Banking [180]. - Nonperforming assets decreased by $7 million to $301 million at March 31, 2025, from $308 million at December 31, 2024, with nonperforming loans at 0.60% of total loans [224]. Asset and Liability Management - Total assets decreased to $77.558 billion in Q1 2025 from $79.234 billion in Q4 2024, indicating a reduction in the balance sheet size [144]. - Total assets decreased by $1.7 billion to $77.6 billion at March 31, 2025, reflecting a $1.2 billion decrease in interest-bearing deposits with banks [188]. - Total liabilities decreased by $2.2 billion to $70.6 billion at March 31, 2025, primarily due to a $1.3 billion decrease in noninterest-bearing deposits [189]. - The allowance for credit losses decreased by $6 million to $719 million, maintaining a ratio of 1.44% of total loans [210]. Economic Outlook - The Corporation's management anticipates continued economic uncertainty impacting credit quality and loan performance in the upcoming quarters [140]. - Economic forecasts as of March 31, 2025, reflected improved GDP growth and unemployment trends compared to December 31, 2024 [213]. - Real GDP growth is projected to improve unevenly, reaching 2.1% by the end of 2026, while the unemployment rate is expected to hold at approximately 4.2% throughout the forecast period [218]. Capital and Liquidity - The Corporation's estimated Common Equity Tier 1 (CET1) capital ratio increased to 12.05% from 11.89% at December 31, 2024 [200]. - The Corporation had liquid assets of $1.3 billion on an unconsolidated basis as of March 31, 2025, ensuring sufficient liquidity for expected obligations [266]. - The Corporation's liquidity sources included $4.549 billion in cash on deposit with the FRB and $7.441 billion in unencumbered investment securities, totaling available liquidity of $42.450 billion as of March 31, 2025 [291]. Direct Express Program - For the three months ended March 31, 2025, average deposits related to the Direct Express program were $3.6 billion, all of which were noninterest-bearing [299]. - Card fee income related to the Direct Express program was $28 million for the three months ended March 31, 2025 [299]. - Noninterest expenses related to the Direct Express program for the three months ended March 31, 2025 were $28 million, primarily due to outside processing fee expense [299]. - The Corporation cannot currently predict the impact of the potential loss of the Direct Express contract and related deposits, which could be material [299].