Comerica Q4 Earnings Miss Estimates on Lower NII, Fee Income Rises Y/Y

Core Viewpoint - Comerica Incorporated (CMA) reported mixed financial results for the fourth quarter of 2024, with adjusted earnings per share (EPS) missing estimates, while full-year EPS showed a decline compared to the previous year [1][2]. Financial Performance - Fourth-quarter adjusted EPS was $1.20, below the Zacks Consensus Estimate of $1.25, and down from $1.46 in the prior-year quarter [1]. - For 2024, adjusted EPS was $5.39, slightly beating the Zacks Consensus Estimate of $5.38, but down from $7.75 reported in the year-ago quarter [2]. - Net income attributable to common shareholders (GAAP basis) for the fourth quarter was $163 million, significantly up from $27 million in the prior-year quarter [3]. - Full-year net income attributable to common shareholders (GAAP basis) was $671 million, a decrease of 21.4% year over year [3]. Revenue and Expenses - Total quarterly revenues were $825 million, up 5.5% year over year, but missed the consensus estimate of $834.6 million [4]. - Full-year revenues totaled $3.24 billion, down 9.7% year over year, and also missed the Zacks Consensus Estimate of $3.28 billion [4]. - Quarterly net interest income (NII) fell 1.5% year over year to $575 million, while the net interest margin increased by 15 basis points to 3.06% [4]. - Total non-interest income was $250 million, up 26.3% year over year, driven by increases in service charges, capital markets income, and other fees [5]. - Non-interest expenses totaled $587 million, down 18.2% year over year, primarily due to reductions in salaries and benefits [5]. Efficiency and Credit Quality - The efficiency ratio improved to 69.51% from 91.86% in the prior-year quarter, indicating increased profitability [6]. - The company recorded a provision for credit loss of $21 million in the fourth quarter, a 75% increase year over year [8]. - Total non-performing assets surged 73% year over year to $308 million [8]. - The allowance for credit losses to total loans ratio was 1.44%, up from 1.4% a year earlier [9]. Capital Position - Total capital ratio improved to 14.22% from 13.52% in the prior-year quarter, and the Common Equity Tier 1 capital ratio rose to 11.89% from 11.09% [10]. - The tangible common equity ratio was 7%, up from 6.3% in the prior-year quarter [10]. - The company repurchased $100 million of common stock under its share repurchase program [11]. Outlook - The company's solid capital position is expected to support capital distribution activities and enhance investor confidence [12]. - Focus on improving operational efficiency is anticipated to bolster financial performance, although lower NII and weak asset quality remain concerns [12].