Comerica (CMA) Up 7.2% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Comerica Incorporated reported a mixed performance in its recent earnings, with adjusted earnings per share missing estimates while showing some positive trends in fee income and capital position [2][3][4]. Financial Performance - The fourth-quarter 2024 adjusted EPS was $1.2, missing the Zacks Consensus Estimate of$ 1.25, and down from $1.46 in the prior-year quarter [2]. - For the full year 2024, adjusted EPS was$ 5.39, slightly beating the consensus estimate of $5.38 but down from$ 7.75 in the previous year [2]. - Net income attributable to common shareholders for Q4 2024 was $163 million, significantly up from$ 27 million in the year-ago quarter, while full-year net income 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 missing the consensus estimate of $834.6 million [4]. - Full-year revenues were$ 3.24 billion, down 9.7% year over year, also missing the consensus estimate of $3.28 billion [4]. - Non-interest income increased to$ 250 million, up 26.3% year over year, driven by higher service charges and fees [5]. - Non-interest expenses decreased to $587 million, down 18.2% year over year, primarily due to lower salaries and benefits [5]. Asset Quality and Credit Risk - The company recorded a provision for credit loss of$ 21 million in Q4, a 75% increase year over year, with total non-performing assets rising 73% to $308 million [8]. - The allowance for credit losses to total loans ratio was 1.44%, up from 1.4% a year earlier, with net charge-offs increasing by 20% year over year [9]. Capital Position - The total capital ratio improved to 14.22%, up from 13.52% in the prior-year quarter, and the Common Equity Tier 1 capital ratio rose to 11.89% from 11.09% [10]. - The company repurchased$ 100 million of common stock under its share repurchase program [11]. Outlook - For Q1 2025, net interest income (NII) is projected to decline by 1-2% from $575 million, while non-interest income is expected to increase by 6-7% from$ 250 million [12]. - Average deposits are anticipated to decline by 2-3% from the $63.8 billion recorded in Q4 2024, with average loans expected to remain flat [13]. - For the full year 2025, NII is expected to increase by 6-7%, while non-interest income is projected to rise by 4% [14]. Industry Comparison - Comerica operates within the Zacks Banks - Major Regional industry, where The Bank of New York Mellon Corporation has shown a 2.9% gain over the past month [20]. - The Bank of New York Mellon reported revenues of$ 4.85 billion, a year-over-year increase of 12.4%, and is expected to post earnings of $1.50 per share for the current quarter, reflecting a 16.3% year-over-year change [21].