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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Comerica Beats Estimates but Loan Growth Slows

Stocks in this article: CMA

Comerica added $13 million to loan loss reserves during the second quarter, down from $16 million the previous quarter and $19 million a year earlier, as credit quality continued to improve. Nonperforming assets, including loans in nonaccrual status and repossessed property totaled $500 million as of June 30, declining from $555 million in March and $814 million in June 2012.

Certain changes in the Federal Reserve's finalized capital rules on July 2, along with the bank's earnings, helped boost Comerica's estimated Basel III Tier 1 common equity ratio to a very strong 10.04% as of June 30, increasing from 9.86% at the end of the first quarter.

While Comerica's net income was flat year over year, earnings-per-share rose because of a lower share count. During the second quarter, the company bought back 1.9 million shares. Comerica in March was approved by the Federal Reserve for up to $288 million in common share repurchases through the first quarter of 2014.

The company said that during the second quarter, 72% of earnings were returned to investors through dividends and share buybacks.

Comerica's shares were down 2% in early trading Tuesday to $40.82.

"2Q results beat consensus due to lower provision expense, better core fees, and continued tight expense controls," wrote Jefferies analyst Ken Usdin in a note to clients Monday. "We believe estimates should have a slight upward bias as these items modestly reset in our model."

Usdin rates Comerica a "hold," with a $41 price target, estimating the company will earn $2.80 a share this year, with EPS climbing to $2.85 in 2014.

The analyst called the company's loan growth "somewhat soft," but noted that "average mortgage banker loans increased to $1.8B )vs. $1.7B in 1Q)."

Comerica's shares closed at $41.56 Monday, returning 38% this year, following a 20% return during 2012. The shares trade for 1.2 times their reported June 30 tangible book value of 33.79, and for 14.5 times the consensus 2014 earnings estimate of $2.86. The consensus 2013 EPS estimate is $2.81.

Based on a quarterly payout of 17 cents, the shares have a dividend yield of 1.64%.

CMA Chart CMA data by YCharts

Interested in more on Comerica? See TheStreet Ratings' report card for this stock.


-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
2 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!


DOW 18,083.99 +53.78 0.30%
S&P 500 2,092.08 +10.20 0.49%
NASDAQ 4,812.9570 +39.4850 0.83%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

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