This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Commercial Loans Fuel Comerica's Earnings Beat (Update 2)

  • Comerica reports second-quarter earnings of 73 cents a share, beating the consensus estimate of 62 cents.
  • Average commercial loans grew 5% during the second quarter.
  • Net interest margin declined to 3.10% from 3.19% the previous quarter.

Updated with comments from Jefferies analyst Ken Usdin, FBR analyst Paul Miller, and market close information.

NEW YORK ( TheStreet) -- Comerica (CMA - Get Report) on Tuesday reported that its average commercial loans grew 5% during the second quarter, for its eighth consecutive quarter of growth for the coveted loan type.

The Dallas lender reported second-quarter net income attributed to common shares of 73 cents, soundly beating the consensus estimate of a 62-cent profit among analysts polled by Thomson Reuters.

In comparison, Comerica earned $129 million, or 66 cents a share, in the first quarter, and $95 million, or 53 cents a share, during the second quarter of 2011.

The company's shares rose 4% to close at $31.99.

Comerica's second-quarter bottom line was boosted by a $37 million release of loan loss reserves. The company had released $22 million in reserves the previous quarter, and $43 million a year earlier.

Despite seeing 2% growth in total average loans during the second quarter, Comerica's net interest income declined during the second quarter to $435 million, from $443 million the previous quarter, as "the benefit from an increase in average loans ($8 million) was offset by a decrease in the accretion of the purchase discount on the acquired Sterling loan portfolio ($7 million) and lower loan yields ($4 million)," according to the company. Comerica acquired Texas competitor Sterling Bancshares in July 2011.

The company's net interest margin -- the spread between its average yield on loans and investments and its average cost for deposits and wholesale borrowings -- declined to 3.10%, from 3.19% in the first quarter and 3.14% in the second quarter of 2011. Margins have been declining for most regional banks in the prolonged low-rate environment, as short-term interest rates remain at historically low levels, and long-term rates continue to decline.

Comerica's second-quarter earnings beat reflected a decline in noninterest expenses to $433 million, from $449 million the previous quarter, although expenses increased from $411 million a year earlier. The main factor in the second-quarter expense decline was the seasonal spike in employee compensation costs during the first quarter. Merger and restructuring charges totaled $8 million during the second quarter, and Comerica said that "restructuring charges of approximately $25 million to $30 million are expected to be incurred for the remainder of 2012."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
CMA $44.73 0.00%
AAPL $123.25 0.00%
FB $83.30 0.00%
GOOG $548.34 0.00%
TSLA $185.00 0.00%


DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs