Comerica(US:CMA) ZACKS·2025-10-17 18:16Core Insights - Comerica Incorporated (CMA) reported third-quarter 2025 earnings per share (EPS) of $1.35, exceeding the Zacks Consensus Estimate of $1.28, but down from $1.37 in the prior-year quarter [1][9] - The results were supported by an increase in net interest income (NII) and deposit balances, although concerns arose from lower loan balances, a decline in non-interest income, rising expenses, and deteriorating asset quality [1][13] Financial Performance - Net income attributable to common shareholders was $175 million, a decline of 1.1% from the year-ago quarter [2] - Total quarterly revenues reached $838 million, up 3.3% year over year, but missed the consensus estimate by 0.7% [3] - Quarterly NII increased by 7.5% year over year to $574 million, with the net interest margin rising 29 basis points to 3.09% [3] - Total non-interest income was $264 million, down 4.7% year over year, while non-interest expenses totaled $589 million, up 4.8% year over year [3] Asset Quality and Credit - The efficiency ratio was 70.23%, compared to 68.8% in the prior-year quarter, indicating declining profitability [4] - Total loans decreased slightly to $50.9 billion, while total deposits rose 4.3% to $62.6 billion as of September 30, 2025 [5] - The company recorded a provision for credit loss of $22 million, up from $14 million in the year-ago quarter, with total non-performing assets rising 4% year over year to $260 million [6] - The allowance for credit losses to total loans ratio remained unchanged at 1.43%, with net charge-offs significantly increasing to $32 million from $11 million in the prior-year quarter [7] Capital Position - The total capital ratio was 14.12%, down from 14.29% in the year-ago quarter, while the Common Equity Tier 1 capital ratio decreased to 11.90% from 11.96% [8] - The tangible common equity ratio improved to 8.34% from 8.01% in the prior-year quarter [8] Strategic Developments - Comerica announced a merger agreement with Fifth Third Bancorp valued at $10.9 billion, expected to close in early 2026, which will create the ninth-largest U.S. bank with nearly $288 billion in assets [9][11] - The merger aims to enhance scale, diversification, and competitiveness in key growth markets, with a more balanced loan composition reducing commercial loan concentration from 44% to 36% [12][14] - The company repurchased $150 million of common stock under its share repurchase program [10]