Comerica Incorporated CMA has reported first-quarter 2025 adjusted earnings per share (EPS) of $1.25, beating the Zacks Consensus Estimate of $1.14. In the prior-year quarter, the company reported an EPS of $1.29.

Results benefited from solid fee income and net interest income (NII) growth. Strong capital position and decline in expenses were added positives. Yet, decreased loan and deposit balances, and weak asset quality were concerning.

Net income attributable to common shareholders (GAAP basis) was $165 million, which increased 26% from the year-ago quarter.

Comerica's Quarterly Revenues Rise, Expenses Dip

Total quarterly revenues were $829 million, up 5.7% year over year. However, the top line missed the consensus estimate by 0.4%.

Quarterly NII rose 4.9% on a year-over-year basis to $575 million. The net interest margin increased 38 basis points year over year to 3.18%.

Total non-interest income was $254 million, up 8% on a year-over-year basis. The increase was primarily due to a rise in service charges on deposit accounts, capital markets income and brokerage fees.

Non-interest expenses totaled $584 million, down 3.2% year over year. The decline was primarily due to a fall in outside processing fee expenses and FDIC insurance expenses. 

The efficiency ratio was 70.28% compared with the prior-year quarter’s 76.91%. A fall in this ratio indicates increased profitability.

CMA’s Loans & Deposit Balance Declines

As of March 31, 2025, total loans declined 1.2% on a sequential basis to $49.9 billion. Total deposits declined 3.6% from the previous quarter to $61.5 billion.

Comerica's Credit Quality Deteriorates

The company recorded a provision for credit loss of $20 million in the first quarter, which increased 42.9% year over year.

The allowance for credit losses was $719 million, which fell 1.2% year over year.

Total non-performing assets rose 38.7% year over year to $301 million. 

The allowance for credit losses to total loans ratio was 1.44% as of March 31, 2025, up from 1.43% as of March 31, 2024. Also, the company recorded net charge-offs of $26 million, which rose 85.7% year over year.

CMA's Capital Position Improves

Total capital ratio was 14.39%, up from 13.98% in the year-ago quarter. The Common Equity Tier 1 capital ratio was 12.05%, up from 11.48% in the prior-year quarter.

As of March 31, 2025, CMA's tangible common equity ratio was 7.82%, up from 6.36% in the prior-year quarter.

Comerica’s Capital Distribution Activities

The company repurchased $50 million of common stock under the share repurchase program.

Our View on CMA

The company’s solid capital position will aid capital distribution activities in the upcoming period, boosting investor confidence in the stock. Its focus on improving operational efficiency will support financials. The rise in NII and decline in expenses look encouraging. However, weak asset quality, and a decline in loan and deposit balances remain near-term concerns.

Comerica Incorporated Price, Consensus and EPS Surprise

Comerica Incorporated price-consensus-eps-surprise-chart | Comerica Incorporated Quote

Currently, Comerica carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Banks

Synovus Financial Corp. SNV reported first-quarter 2025 adjusted earnings per share of $1.30, which surpassed the Zacks Consensus Estimate of $1.11 per share. This compares with earnings of 79 cents per share a year ago. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

SNV’s results benefited from strong year-over-year growth in NII, and a fall in expenses and provisions for credit losses. Also, improving loan balances was a tailwind. However, a decline in non-interest revenues was a major headwind.

First Horizon Corporation’s FHN first-quarter 2025 adjusted earnings per share (excluding notable items) of 42 cents surpassed the Zacks Consensus Estimate of 40 cents. This compares favorably with 35 cents in the year-ago quarter.

FHN’s results benefited from a marginal rise in NII and a decline in expenses. Also, lower provisions were other positives. However, a fall in fee income and a deteriorating capital position were major headwinds.

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