Comerica (CMA) Q2 Earnings Beat on High Loan Demand, Stock Falls

Core Viewpoint - The financial results of various companies in the banking sector reflect challenges such as declining net interest income (NII), increased expenses, and mixed credit quality, despite some support from higher loan demand and capital positions. Group 1: Financial Performance - FNB's results were impacted by higher provisions, expenses, and lower NII, but supported by increased non-interest income and higher average loans and deposits [2] - First Horizon Corporation's adjusted earnings per share of 36 cents missed estimates and declined 7.7% year over year [4] - Net income for common shareholders at First Horizon was $200 million, down 24.8% from the previous year [5] - Comerica reported adjusted earnings per share of $1.53, beating estimates but down 25.4% year over year [9] - Total quarterly revenues for Comerica were $824 million, down 10.8% year over year but above consensus estimates [10] Group 2: Credit Quality and Provisions - The allowance for credit losses at First Horizon was $717 million, down 1.5% from the year-ago quarter [1] - Total non-performing assets increased 21.5% year over year to $226 million [12] - The allowance for credit losses to total loans ratio was 1.38% as of June 30, 2024, up from 1.31% a year earlier [19] Group 3: Capital Position and Expenses - Comerica's tangible common equity ratio improved to 6.49% from 5.06% year over year [6] - Non-interest expenses for Comerica totaled $555 million, up 3.7% year over year due to increased salaries and FDIC insurance expenses [11] - The total capital ratio for Comerica was 14.02%, up from 12.79% in the prior year [20] - The efficiency ratio for First Horizon was 67.77%, indicating lower profitability compared to 57.50% in the prior year [17] Group 4: Market Reaction - Shares of the company lost more than 12% following the earnings release due to negative aspects such as declining net interest and fee income [7] - FNB's adjusted earnings per share of 34 cents lagged estimates by a penny and declined 12.8% from the prior year [23]