Comerica(US:CMA)2025-10-28 20:48Financial Performance - Net income for Q3 2025 was $176 million, a decrease of $23 million from $199 million in Q2 2025, primarily due to increased noninterest expenses and decreased noninterest income [170]. - Diluted earnings per share for Q3 2025 were $1.35, down from $1.42 in Q2 2025, reflecting a decrease of $0.07 per share [170]. - Net income for the nine months ended September 30, 2025, increased by $19 million to $547 million compared to the same period in 2024, with diluted earnings per share rising to $4.01 [189]. - Net income for the Corporation was $547 million for the period ending September 30, 2025 [225]. Income and Expenses - Net interest income for Q3 2025 was $574 million, slightly down from $575 million in Q2 2025 [170]. - Noninterest income decreased by $10 million to $264 million for the three months ended September 30, 2025, primarily due to declines in fiduciary income and capital markets income [184]. - Noninterest expenses increased to $589 million in Q3 2025 from $561 million in Q2 2025 [170]. - Total noninterest expenses increased by $14 million to $1,734 million for the nine months ended September 30, 2025, driven by higher salaries and benefits expenses [201]. Loans and Credit Losses - Provision for credit losses decreased to $22 million in Q3 2025 from $44 million in Q2 2025 [170]. - Net loan charge-offs increased to $32 million, or 25 basis points as a percentage of average loans, for the three months ended September 30, 2025, up from $28 million, or 22 basis points, in the previous quarter [180]. - Provision for credit losses increased by $58 million to $86 million for the nine months ended September 30, 2025, reflecting economic uncertainty and changes in portfolio composition [196]. - The allowance for credit losses decreased by $10 million to $725 million at September 30, 2025, reflecting a slightly improved economic forecast [179]. Assets and Liabilities - The Corporation's total assets reached $78.276 billion in Q3 2025, up from $77.543 billion in Q2 2025 [172]. - Total assets decreased by $1.9 billion to $77.4 billion at September 30, 2025, compared to $79.3 billion at December 31, 2024 [217]. - Total liabilities decreased by $2.8 billion to $69.9 billion at September 30, 2025, compared to $72.8 billion at December 31, 2024 [218]. Business Segments - The Corporation has strategically aligned its operations into three major business segments: Commercial Bank, Retail Bank, and Wealth Management, focusing on differentiated customer types and related products [203]. - Commercial Bank's net income for the nine months ended September 30, 2025, was $716 million, a decrease of $108 million (13%) from the same period in 2024 [209]. - Retail Bank's net income increased by $109 million (89%) to $232 million for the nine months ended September 30, 2025, driven by a $130 million (21%) increase in net interest income [210]. - Wealth Management's net income was $62 million for the nine months ended September 30, 2025, reflecting a slight increase of $1 million (3%) compared to the previous year [211]. Capital and Equity - The Corporation's estimated Common Equity Tier 1 (CET1) capital ratio was 11.90%, stable from 11.89% at December 31, 2024 [231]. - Common equity tier 1 capital as of September 30, 2025, is $8,657 million, slightly down from $8,667 million on December 31, 2024 [341]. - Total shareholders' equity rose to $7,429 million, up from $6,543 million [341]. - The common equity ratio improved to 9.09% from 7.75% [341]. Liquidity and Funding - The Corporation has $42.981 billion in available liquidity as of September 30, 2025, including $3.914 billion in cash on deposit with the FRB and $11.594 billion in unencumbered investment securities [325]. - The Corporation had liquid assets of $1.4 billion on an unconsolidated basis at September 30, 2025, ensuring sufficient liquidity to meet expected obligations [298]. - Total uninsured deposits amounted to $34.857 billion (56%) as of September 30, 2025, up from $33.387 billion (52%) at December 31, 2024 [331]. Market and Economic Conditions - The economic forecast predicts real GDP growth to increase to 2.3% in the first quarter of 2027 [246]. - The economic value of equity is expected to decrease by $302 million (2%) if interest rates rise by 100 basis points as of September 30, 2025 [314]. - The sensitivity of the economic value of equity to interest rate changes decreased from December 31, 2024, primarily due to a declining notional amount of cash flow swaps [314]. Legal and Regulatory Matters - The corporation does not expect the provisions of H.R. 1, The One Big Beautiful Bill Act, to have a material impact on its financial statements [188]. - The company is involved in legal proceedings as noted in "Part I. Item 1. Note 14 – Contingent Liabilities" [343].