• Earnings: $172 million or $1.25 per share.
• Net Interest Income: Stable at $575 million, with a 12 basis point expansion in net interest margin.
• Average Loans: Declined less than 1%, with specific decreases in national dealer services and commercial real estate.
• Average Deposits: Decreased by $1.4 billion from the fourth quarter, with non-interest bearing deposits remaining flat at 38% of total deposits.
• Net Charge-Offs: Increased to 21 basis points, at the low end of the normal 20 to 40 basis point range.
• Non-Interest Income: Increased by $4 million, with a notable $19 million benefit from the absence of prior quarter securities repositioning loss.
• Non-Interest Expenses: Decreased by $3 million, with reductions in litigation expenses and consulting fees.
• Common Equity Tier 1 (CET1) Ratio: Estimated at 12.05%, above the strategic target.
• Shareholder Returns: $143 million returned through share repurchases and dividends.

• Warning! GuruFocus has detected 2 Warning Sign with CMA.

Release Date: April 21, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Comerica Inc (NYSE:CMA) exceeded expectations in several categories, resulting in higher profitability compared to the previous quarter.
• The company saw a 12 basis point expansion in net interest margin due to good deposit trends and structural benefits from swaps and securities portfolios.
• Comerica Inc (NYSE:CMA) maintained a strong capital position with an estimated CET1 ratio of 12.05%, providing flexibility to navigate economic uncertainties.
• The company returned $143 million to shareholders through share repurchases and dividends, demonstrating a commitment to shareholder value.
• Non-interest income grew, and the company expects to drive positive momentum in customer-related fees throughout the year.

Negative Points

• Comerica Inc (NYSE:CMA) experienced a modest reduction in average loan balances due to muted loan demand and declines in national dealer services and commercial real estate.
• Customer sentiment took a step back due to increased macroeconomic uncertainty, impacting market confidence.
• Net charge-offs increased, although they remained at the low end of the normal range, indicating some pressure on credit quality.
• Non-interest expenses declined, but the company noted a slowdown in business activity, which could impact future growth.
• The company anticipates a potential wide range of outcomes for 2025 due to increased economic uncertainty, with slower GDP growth expected compared to 2024.

Q & A Highlights

Q: Can you discuss the loan growth outlook and what you're hearing from lenders and borrowers? A: Peter Sefzik, Chief Banking Officer: Near-term, customers are taking their foot off the accelerator but not putting the brakes on. There's more concern in markets like Michigan compared to Texas. Long-term, we see good outlooks and pipeline growth, expecting loan demand to improve as the year progresses.

Q: What are your thoughts on commercial real estate and its potential stabilization? A: Peter Sefzik, Chief Banking Officer: There is hope for stabilization. Our outlook includes commercial real estate not declining as much as previously thought. Deal flow has picked up, and while it's still a headwind, it's not as strong as it was 60-90 days ago.

Q: Can you explain the progression on fee and expense guidance? A: James Herzog, Chief Financial Officer: Non-customer trends put pressure on non-interest income, but we expect customer-related fees to bounce back. On expenses, we have flexibility and will monitor revenue trends to calibrate spending, focusing on strategic investments.

Q: How are you managing deposit costs and what room is there for further adjustments? A: James Herzog, Chief Financial Officer: We've had success with deposit pricing, achieving a 71% beta since rate cuts began. We expect this to slow, with potential upward pressure in some areas. Brokered deposits will run off, benefiting our cost structure.

Q: What is your outlook for share repurchases in the coming quarters? A: James Herzog, Chief Financial Officer: We have the capacity for additional repurchases, potentially up to $100 million, depending on market conditions, credit stability, and loan demand. We will monitor these factors closely before committing to specific amounts.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.