ComericaShares of Comerica of Dallas have returned 42% this year, following a 20% return during 2012. The shares trade for 1.3 times the company's reported June 30 tangible book value of $33.79, and 14.6 times the consensus 2014 earnings estimate of 2.92, among analysts polled by Thomson Reuters. The Consensus 2015 EPS estimate is $3.35. Comerica last month reported second-quarter earnings of $143 million, or 76 cents a share, compared to $134 million, or 70 cents a share in the first quarter, and $143 million, or 73 cents a share, during the second quarter of 2012. Net interest income declined to $414 million during the second quarter from $416 million the previous quarter and $435 million a year earlier. The bank's second-quarter net interest margin was 2.83%, narrowing from 2.88% in the first quarter and 3.10% during the second quarter of 2012. The company's second-quarter return on average assets was 0.90% and its return on average common equity was 8.23%. Please see TheStreet's earnings coverage for more on Comerica's second-quarter results. "CMA remains among the best positioned to benefit from rising short-term interest rates," according to JPMorgan Analyst Steven Alexopoulos. In a note to clients on Friday, the analyst wrote, "As we all (perhaps impatiently) wait for the day that short-term rates actually start increasing, the company is likely to do very little between now and then to diminish the potential earnings 'pop' from higher rates." The Federal Reserve has kept short-term rates in a range of zero to 0.25% since late 2008. The Federal Open Market Committee has repeatedly said this "highly accommodative" policy is likely to remain appropriate at least until the U.S. unemployment rate falls below 6.5%. The U.S. unemployment rate in July improved to 7.4% from 7.6% in June. So the recent rise in long-term rates won't do it. Comerica has estimated that a straight line nonparallel rise in rates of 200 basis points over a 12-month period would increase its net interest income by $187 million over a 12-month period. The company also provided a hypothetical estimate in its second-quarter 10-Q filing that an instantaneous parallel rise in rates would boost annual net interest income by $823 million.
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