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Comerica Earnings Rise on Fee Income Growth (Update 1)

Comerica provided plenty of fourth-quarter guidance, saying it expected average loan balances to be "stable" from the third quarter, "reflecting auto-dealer floor plan loans rebounding from seasonal low along with continued decline in mortgage warehouse lending and economic uncertainty impacting demand."

The bank also expects a continued decline in net interest income, with "relatively stable" customer-driven noninterest income and a slight decline in expenses.

Comerica CEO Ralph Babb said in the bank's earnings release that "fee income growth, expense control and continued solid credit quality contributed to our 28 percent year-over-year increase in earnings per share.

"We believe our footprint is well situated in Texas, California and Michigan, and that our relationship banking strategy contributes to our continued success," he added.

Comerica's shares were up 3% in morning trading, to $41.67.

Sterne Agee analyst Brett Rabatin has a neutral rating on Comerica, and in a note to clients Wednesday morning said the company's third-quarter results exceeded his estimate of 71 cents a share, "primarily due to stronger fee income, continued non-interest expense management and lower provisioning than anticipated."

"However, the loan decline was meaningful and the outlook is not for growth near-term," he wrote, adding that the fourth-quarter guidance "appears anemic."

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.
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