Comerica Incorporated (CMA - Free Report) reported fourth-quarter adjusted earnings per share of $1.46, beating the Zacks Consensus Estimate of $1.38. The bottom line reflected a fall of 43.4% from the prior-year quarter.
A decline in revenues and higher expenses compared with the prior-yearquarter primarily affected the results. A sequential decrease in loan and deposit balances was another headwind. Nonetheless, a fall in provisions on a year-over-year basis offered some support.
Net income attributable to common shares was $27 million compared to $342 million in the prior-year quarter.
Adjusted earnings per share for 2023 were $7.75, which surpassed the Zacks Consensus Estimate of $7.65. The bottom line reflected a fall of 10.8% from the prior year. Net income attributable to common shares was $854 million, down 23.9% year over year.
Revenues Decline, Expenses Rise
Total quarterly revenues were $782 million, down 23.3% year over year. Also, the top line missed the consensus estimate of $826.1 million.
Revenues for 2023 were $3.59 billion, up 1.6% year over year. However, the top line lagged the consensus estimate of $3.64 billion.
Quarterly net interest income fell 21.3% on a year-over-year basis to $584 million. The net interest margin contracted 83 basis points year over year to 2.91%.
Total non-interest income was $198 million, down 28.8% on a year-over-year basis. The decrease was primarily due to the risk management hedging loss.
Non-interest expenses totaled $718 million, up 32.7% year over year. An increase in salaries and benefits expenses as well as FDIC insurance expense majorly led to the rise.
The efficiency ratio was 91.86% compared with the prior-year quarter’s 53%. A rise in this ratio indicates lower profitability.
Total loans declined 2.4% on a sequential basis to $52.1 billion. Also, total deposits decreased 1% from the prior quarter to $66.8 billion.
Credit Quality – Mixed Bag
Total non-performing assets decreased 27% year over year to $178 million. A provision for credit losses of $12 million was recorded in the reported quarter compared with $33 million in the prior-year quarter.
However, the allowance for credit losses to total loans ratio was 1.40% as of Dec 31, 2023, up from 1.24% as of Dec 31, 2022. The allowance for credit losses was $728 million, up from the prior-year quarter’s $661 million. Also, the company recorded net charge-offs of $20 million for the quarter under review. CMA registered recoveries of $4 million in the prior year.
Capital Position Improves
Total capital ratio was 13.53%, up from 12.45% in the year-ago quarter. The Common Equity Tier 1 capital ratio was 11.09%, up from 10% in the prior-year quarter.
Further, as of Dec 31, 2023, CMA's tangible common equity ratio was 6.3%, up from 4.89% in the prior-year quarter.
Our Viewpoint
Comerica was affected by a decline in revenues as well as higher expenses. Nonetheless, a fall in provisions on a year-over-year basis offered some cushion. Moreover, its focus on improving operational efficiency will improve margins in the upcoming period.
Currently, Comerica carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Dates of Other Banks
Bank of Hawaii Corporation (BOH - Free Report) is slated to announce fourth-quarter 2023 results on Jan 22.
Over the past month, the Zacks Consensus Estimate for BOH’s quarterly earnings has moved 2.3% up to 89 cents per share. The estimate indicates a 40.7% decrease from the prior-year quarter.
East West Bancorp (EWBC - Free Report) is scheduled to release fourth-quarter 2023 numbers on Jan 23.
Over the past 30 days, the Zacks Consensus Estimate for EWBC’s quarterly earnings has moved 1.6% down to $1.89 per share. The figure implies a 20.3% decline from the prior-year quarter.
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Comerica Incorporated (CMA - Free Report) reported fourth-quarter adjusted earnings per share of $1.46, beating the Zacks Consensus Estimate of $1.38. The bottom line reflected a fall of 43.4% from the prior-year quarter.
A decline in revenues and higher expenses compared with the prior-yearquarter primarily affected the results. A sequential decrease in loan and deposit balances was another headwind. Nonetheless, a fall in provisions on a year-over-year basis offered some support.
Net income attributable to common shares was $27 million compared to $342 million in the prior-year quarter.
Adjusted earnings per share for 2023 were $7.75, which surpassed the Zacks Consensus Estimate of $7.65. The bottom line reflected a fall of 10.8% from the prior year. Net income attributable to common shares was $854 million, down 23.9% year over year.
Revenues Decline, Expenses Rise
Total quarterly revenues were $782 million, down 23.3% year over year. Also, the top line missed the consensus estimate of $826.1 million.
Revenues for 2023 were $3.59 billion, up 1.6% year over year. However, the top line lagged the consensus estimate of $3.64 billion.
Quarterly net interest income fell 21.3% on a year-over-year basis to $584 million. The net interest margin contracted 83 basis points year over year to 2.91%.
Total non-interest income was $198 million, down 28.8% on a year-over-year basis. The decrease was primarily due to the risk management hedging loss.
Non-interest expenses totaled $718 million, up 32.7% year over year. An increase in salaries and benefits expenses as well as FDIC insurance expense majorly led to the rise.
The efficiency ratio was 91.86% compared with the prior-year quarter’s 53%. A rise in this ratio indicates lower profitability.
Total loans declined 2.4% on a sequential basis to $52.1 billion. Also, total deposits decreased 1% from the prior quarter to $66.8 billion.
Credit Quality – Mixed Bag
Total non-performing assets decreased 27% year over year to $178 million. A provision for credit losses of $12 million was recorded in the reported quarter compared with $33 million in the prior-year quarter.
However, the allowance for credit losses to total loans ratio was 1.40% as of Dec 31, 2023, up from 1.24% as of Dec 31, 2022. The allowance for credit losses was $728 million, up from the prior-year quarter’s $661 million. Also, the company recorded net charge-offs of $20 million for the quarter under review. CMA registered recoveries of $4 million in the prior year.
Capital Position Improves
Total capital ratio was 13.53%, up from 12.45% in the year-ago quarter. The Common Equity Tier 1 capital ratio was 11.09%, up from 10% in the prior-year quarter.
Further, as of Dec 31, 2023, CMA's tangible common equity ratio was 6.3%, up from 4.89% in the prior-year quarter.
Our Viewpoint
Comerica was affected by a decline in revenues as well as higher expenses. Nonetheless, a fall in provisions on a year-over-year basis offered some cushion. Moreover, its focus on improving operational efficiency will improve margins in the upcoming period.
Currently, Comerica carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Dates of Other Banks
Bank of Hawaii Corporation (BOH - Free Report) is slated to announce fourth-quarter 2023 results on Jan 22.
Over the past month, the Zacks Consensus Estimate for BOH’s quarterly earnings has moved 2.3% up to 89 cents per share. The estimate indicates a 40.7% decrease from the prior-year quarter.
East West Bancorp (EWBC - Free Report) is scheduled to release fourth-quarter 2023 numbers on Jan 23.
Over the past 30 days, the Zacks Consensus Estimate for EWBC’s quarterly earnings has moved 1.6% down to $1.89 per share. The figure implies a 20.3% decline from the prior-year quarter.
Only $1 to See All Zacks' Buys and Sells
We're not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.
Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.
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