Comerica Misses on Earnings


Comerica (NYS: CMA) reported earnings for its third quarter this morning, and a slight miss on EPS expectations has prompted a small sell off early this morning. With analysts expecting $0.65 in earnings per share, the bank checked in at $0.61 despite record deposits. Nevertheless, lending remains strong, and the bank remains committed to returning income to shareholders despite a slight decrease in net interest income during the quarter.

What I was watching
In addition to the revenue and EPS numbers referenced above, I was also watching for a continued increase in total lending, as well as improvement in nonperforming loans. Comerica has been leading the pack among regionals in increasing lending, and the trend continues, with total loans up slightly, but driven primarily by a $717 million increase in commercial loans during the quarter.

What to expect going forward
Comerica is two quarters into a recently raised dividend, so it might not quite be time to for another dividend raise. However, between share repurchases and its increased dividend, Comerica returned 101% of third-quarter income to shareholders. With Comerica trading near its 2008 financial crisis level prices, it might be an option for investors looking for a choice among regional banks.

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