Comerica Incorporated CMA reported fourth-quarter 2024 adjusted earnings per share (EPS) of $1.2, missing the Zacks Consensus Estimate of $1.25. In the prior-year quarter, the company reported an EPS of $1.46.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
For 2024, adjusted EPS was $5.39, which beat the Zacks Consensus Estimate of $5.38. This compares unfavorably with $7.75 reported in the year-ago quarter.
Results were negatively impacted due to a fall in net interest income (NII) and a weak asset quality. However, a rise in deposit balance, solid fee income growth and a strong capital position offered support.
Net income attributable to common shareholders (GAAP basis) was $163 million, which increased significantly from $27 million reported in the year-ago quarter.
For 2024, the company reported net income attributable to common shareholders (GAAP basis) of $671 million, which decreased 21.4% year over year.
CMA's Quarterly Revenues Decline, Expenses Fall
Total quarterly revenues were $825 million, up 5.5% year over year. However, the top line missed the consensus estimate of $834.6 million.
Full-year revenues were $3.24 billion, which decreased 9.7% year over year. The top line missed the Zacks Consensus Estimate of $3.28 billion.
Quarterly NII fell 1.5% on a year-over-year basis to $575 million. The net interest margin increased 15 basis points year over year to 3.06%.
Total non-interest income was $250 million, up 26.3% on a year-over-year basis. The increase was primarily due to a rise in service charges on deposit accounts, capital markets income, brokerage fees, commercial lending fees and risk management hedging income.
Non-interest expenses totaled $587 million, down 18.2% year over year. The decline was primarily due to a fall in salaries and benefits expenses and FDIC insurance expense.
The efficiency ratio was 69.51% compared with the prior-year quarter’s 91.86%. A fall in this ratio indicates increased profitability.
CMA’s Loans Stable, Deposits Rise
As of Dec. 31, 2024, total loans remained flat on a sequential basis to $50.5 billion. Total deposits increased 1.2% from the previous quarter to $63.8 billion.
CMA's Credit Quality Deteriorates
The company recorded a provision for credit loss of $21 million in the fourth quarter, which increased 75% year over year.
The allowance for credit losses was $725 million, which remained flat year over year.
Total non-performing assets surged 73% year over year to $308 million.
Further, the allowance for credit losses to total loans ratio was 1.44% as of Dec. 31, 2024, up from 1.4% as of Dec. 31, 2023. Also, the company recorded net charge-offs of $16 million, which rose 20% year over year.
CMA's Capital Position Improves
Total capital ratio was 14.22%, up from 13.52% reported in the year-ago quarter. The Common Equity Tier 1 capital ratio was 11.89%, up from 11.09% in the prior-year quarter.
Further, as of Dec. 31, 2024, CMA's tangible common equity ratio was 7%, up from 6.3% in the prior-year quarter.
CMA’s Capital Distribution Activities
The company repurchased $100 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 investors’ confidence in the stock. Its focus on improving operational efficiency will support financials. However, lower NII and weak asset quality 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
Fifth Third Bancorp FITB has reported fourth-quarter 2024 adjusted earnings per share (EPS) of 90 cents, surpassing the Zacks Consensus Estimate of 87 cents. In the prior-year quarter, the company reported an EPS of 99 cents.
FITB’s results benefited from a rise in NII and loan balances. The strong capital position was another positive. A decline in fee income and weak asset quality were headwinds.
M&T Bank Corporation’s MTB fourth-quarter 2024 adjusted net operating earnings per share of $3.92 beat the Zacks Consensus Estimate of $3.70. The bottom line compared favorably with earnings of $2.81 per share in the year-ago quarter.
MTB’s results have benefited from a rise in loans and leases and non-interest income. A decline in expenses and provision for credit losses were other positives. However, a fall in deposit balance was a headwind.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
