NEW YORK (TheStreet) -- Comerica Incorporated (CMA - Get Report) , the 32nd largest bank in the U.S. by total assets, reported fourth-quarter revenue that beat Wall Street estimates Friday. And the bank also rewarded investors by taking 1.3 million shares off the market during the fourth quarter. As the economy improves, more buybacks are likely.
Comerica said net income was $149 million, up 27% from $117 million a year earlier. On a per-share basis, the Dallas-based bank said it earned 80 cents.
Comerica said the fourth-quarter earnings reflected net charges of $3 million, which affected earnings negatively by 2 cents share. On an adjusted basis, earnings were 82 cents per share. Analyst had forecast adjusted earnings of 83 cents, according to Thomson Reuters.
Fourth-quarter revenue, meanwhile, was $640 million, topping the average analyst estimate of $634 million.
For the year, the bank said profits increased nearly 10% to $586 million, or $3.16 per share. This is even though revenue declined by more than 3% year over year to $2.52 billion. Commerce benefited from average total loans that increased $202 million to $47.4 billion in the fourth quarter, helped by a $203 million increase in commercial loans.
Comerica CEO Ralph Babb Jr. was pleased with the results, pointing to the bank's ability to grow total loans $2.2 billion, or 5%, in 2014. And despite recent analyst concerns about Comerica's exposure to oil assets, Babb said Comerica saw increases in all of its business lines and in all three of its major markets.
Regarding oil, he said:
"While we have not yet seen adverse trends materialize in our Energy portfolio, our methodology has appropriately considered the impact of the recent fall in oil and gas prices in our year-end allowance."
All told, Comerica has set the bar pretty high for other regional banks such as BB&T (BBT) , which reports earnings next week. The low-interest rate environment, which has pressured bank revenue, has caused disappointment this week from even the larger banks such as JPMorgan Chase (JPM) and Bank of America (BAC) .
For Comerica, this quarter is the seventh time in eight reporting periods it has beaten earnings estimates. But its shares have fallen more than 11% so far this year, compared with declines of 2.6% for the Dow Jones Industrial Average and 2.8% for the S&P 500. And Comerica's stock is down 13% over the past year.
Nonetheless, Comerica demonstrates it is a top-notch bank with a sound management team that consistently delivers results. And analysts on average expect the bank to grow earnings at an annual rate of 10% over the next five years.
What's more, with the bank buying back a total of 5.2 million shares in 2014, to go along with its 79 cent per-share dividend, Comerica has returned almost $400 million to shareholders. And its growth projections, according to analyst, suggests that Comerica is well positioned to raise its dividend in the coming years and continue buying back its stock.