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Comerica: Financial Winner

NEW YORK ( TheStreet) -- Comerica (CMA - Get Report) was the winner among the largest U.S. banks on Thursday, with shares rising 1.5% to close at $34.38.

The broad indices all faded late to end the session with slight declines, after the Bureau of Economic Analysis released its second estimate on fourth-quarter gross domestic product, showing that the U.S. economy expanded at an annual rate of 0.1%. The GDP growth figure was revised from the previous estimate of a negative growth rate of 0.1%. The consensus among economists was for the revised GDP growth rate to come in at 0.5%, according to Zacks.

The Labor Department said initial unemployment claims for the week ended Feb. 23 were 344,000, a decrease of 22,000 from the previous week's upwardly revised 366,000. The four-week moving average was 355,000, a decline of 6,750 from the previous week's 361,750.

Continuing claims for the week ended Feb. 16 were 3.074 million, down 91,000 from the preceding week's upwardly revised level of 3.165 million.

In other U.S. economic news on Thursday, the Chicago Purchasing Managers Index rose to 56.8 in February from 55.6 in January.

The KBW Bank Index (I:BKX) was down slightly to close at 53.98.


Shares of Comerica of Dallas have now returned 13% this year, following a 20% return during 2012. The shares trade for just above tangible book value, according to Thomson Reuters Bank Insight, and for 12.3 times the consensus 2014 earnings estimate of $2.79 a share, among analysts polled by Thomson Reuters. The consensus 2013 EPS estimate is $2.76.

Based on a quarterly payout of 17 cents, the shares have a dividend yield of 1.98%.

A major concern for Comerica's investors coming out of fourth-quarter earnings season was the narrowing of the company's net interest margin (NIM), which is the spread between the average yield on loans and investments and the average cost for deposits and borrowings. The company's fourth-quarter NIM was 2.87%, declining from 2.96% the previous quarter, and 3.19% a year earlier.

Loan growth was insufficient to offset the narrowing margin, as fourth-quarter net interest income declined to $424 million from $427 million in the third quarter and $444 million in the fourth quarter of 2011.
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