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Comerica's Q2 Earnings to be Hurt by Higher Expenses & Lower Deposits
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Key Takeaways
CMA's Q2 EPS estimate is $1.23, down 19.6% year over year, with revenues expected to rise 2.5%.
Higher expenses and lower average deposits are likely to pressure Comerica's profitability.
Fee income is expected to grow 3.7%, led by stronger capital markets and card-related revenues.
Comerica Incorporated (CMA - Free Report) is scheduled to report second-quarter 2025 results on July 18, before the opening bell. The bank’s revenues are expected to increase while earnings are likely to decline from the year-ago quarter’s reported figures.
The bank’s earnings for the first quarter of 2025 beat the Zacks Consensus Estimate. Results benefited from solid fee income and net interest income (NII) growth alongside lower expenses.
CMA has a decent earnings surprise history. Its earnings surpassed estimates in three of the trailing four quarters and missed once, the surprise being 12.58%, on average.
The Zacks Consensus Estimate for second-quarter 2025 earnings of $1.23 per share has been revised marginally downward over the past seven days. This indicates a 19.6% decline from the year-ago quarter’s reported figure. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The consensus estimate for second-quarter 2025 revenues is pegged at $844.7 million, implying an increase of 2.5% from the year-ago reported figure.
Factors to Influence CMA’s Q2 Earnings
Loans & NII: In the second quarter, the lending scenario was decent as Trump's tariff plans were halted for 90 days alongside softening inflation and a solid labor market. Per the Fed’s latest data, the demand for overall loans was modest in the quarter.
From the end of the first quarter of 2025 until the end of May 2025, the company’s average loans were marginally up on a sequential basis. Management expects average loans to be higher than the first-quarter 2025 reported figure.
Given this, CMA’s average earning assets are likely to have witnessed a modest growth in the quarter to be reported. The Zacks Consensus Estimate of $70.4 billion for average earning assets indicates a marginal increase on a sequential basis.
The Federal Reserve kept interest rates unchanged at 4.25-4.5% in the second quarter. As such, CMA’s NII is likely to have benefited to some extent, given higher interest rates partially offset by higher funding costs.
The consensus estimate for NII is pegged at $576.5 million, indicating a marginal rise from the prior quarter's reported figure. Management expects second-quarter NII to remain relatively flat from the prior quarter’s figure of $575 million.
Non-Interest Income: Global mergers and acquisitions (M&As) in the second quarter of 2025 were impressive than previously expected. Markets plunged in early April after Trump announced sweeping tariffs, rattling business confidence. But as trade demands eased and policy direction became clearer, deal-making activities resumed in the last month of the quarter.
The IPO market in the second quarter saw a resurgence, with a significant increase in both the number of IPOs and the amount of capital raised. This was driven by several factors, including strategic tariff pauses and positive economic data, which resulted in a rebound in market sentiment. Further, global bond issuance volume was decent.
Thus, the company’s capital market fees are likely to have witnessed a decent growth in the quarter to be reported. The Zacks Consensus Estimate for capital markets income is pegged at $32.8 million, indicating a 5.9% sequential rise.
Average deposits (excluding brokered time deposits) declined 1% to $61.3 billion from the end of the first quarter of 2025 until the end of May. Management anticipates average deposits to decline from those reported in the first quarter of 2025. As such, the company’s service charges on deposits are likely to have declined. The Zacks Consensus Estimate for service charge on deposit is pegged at $47 million, indicating an increase of 2.1% from the prior quarter’s actual.
The Zacks Consensus Estimate for card fees is pegged at $61 million, indicating a 3.4% rise from the prior quarter.
The Zacks Consensus Estimate for overall fee income is pinned at $263.5 million, indicating an increase of 3.7% from the previous quarter’s actual. Management expects non-interest income to witness a strong growth in almost all categories from the prior quarter’s actual of $254 million.
Expenses: The company is expected to have incurred higher expenses due to higher compensation expenses and lower gains on the sale of real estate. Such rising expenses are estimated to have weighed on its expense base to some extent in the quarter under review and hindered bottom-line growth.
Management projects non-interest expenses to increase slightly from the first-quarter 2025 reported level of $584 million as the company continues to balance strategic and risk management investments with the drive toward efficiency.
Asset Quality: The company is likely to have set aside a substantial amount of money for potential bad loans, given the expectations of higher for longer interest rate backdrop and tariff-related uncertainty.
The Zacks Consensus Estimate for non-performing loans is pegged at $308.5 million, indicating a 2.5% rise from the prior quarter's reported figure.
What Does Our Model Unveil for CMA?
Per our proven model, the chances of Comerica beating estimates this time are low. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you can see below. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: Comerica has an Earnings ESP of -0.46%.
Zacks Rank: CMA currently carries a Zacks Rank of 3.
Stocks to Consider
Here are some bank stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around.
Over the past seven days, the Zacks Consensus Estimate for WaFd’s quarterly earnings has been unchanged at 67 cents per share.
The Earnings ESP for Associated Banc-Corp (ASB - Free Report) is +0.81% and it carries a Zacks Rank #2 at present. The company is slated to report second-quarter 2025 results on July 24.
Over the past seven days, the Zacks Consensus Estimate for Associated Banc-Corp’s quarterly earnings has been revised 1.6% upward to 62 cents per share.
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Comerica's Q2 Earnings to be Hurt by Higher Expenses & Lower Deposits
Key Takeaways
Comerica Incorporated (CMA - Free Report) is scheduled to report second-quarter 2025 results on July 18, before the opening bell. The bank’s revenues are expected to increase while earnings are likely to decline from the year-ago quarter’s reported figures.
The bank’s earnings for the first quarter of 2025 beat the Zacks Consensus Estimate. Results benefited from solid fee income and net interest income (NII) growth alongside lower expenses.
CMA has a decent earnings surprise history. Its earnings surpassed estimates in three of the trailing four quarters and missed once, the surprise being 12.58%, on average.
Comerica Incorporated Price and EPS Surprise
Comerica Incorporated price-eps-surprise | Comerica Incorporated Quote
The Zacks Consensus Estimate for second-quarter 2025 earnings of $1.23 per share has been revised marginally downward over the past seven days. This indicates a 19.6% decline from the year-ago quarter’s reported figure. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The consensus estimate for second-quarter 2025 revenues is pegged at $844.7 million, implying an increase of 2.5% from the year-ago reported figure.
Factors to Influence CMA’s Q2 Earnings
Loans & NII: In the second quarter, the lending scenario was decent as Trump's tariff plans were halted for 90 days alongside softening inflation and a solid labor market. Per the Fed’s latest data, the demand for overall loans was modest in the quarter.
From the end of the first quarter of 2025 until the end of May 2025, the company’s average loans were marginally up on a sequential basis. Management expects average loans to be higher than the first-quarter 2025 reported figure.
Given this, CMA’s average earning assets are likely to have witnessed a modest growth in the quarter to be reported. The Zacks Consensus Estimate of $70.4 billion for average earning assets indicates a marginal increase on a sequential basis.
The Federal Reserve kept interest rates unchanged at 4.25-4.5% in the second quarter. As such, CMA’s NII is likely to have benefited to some extent, given higher interest rates partially offset by higher funding costs.
The consensus estimate for NII is pegged at $576.5 million, indicating a marginal rise from the prior quarter's reported figure. Management expects second-quarter NII to remain relatively flat from the prior quarter’s figure of $575 million.
Non-Interest Income: Global mergers and acquisitions (M&As) in the second quarter of 2025 were impressive than previously expected. Markets plunged in early April after Trump announced sweeping tariffs, rattling business confidence. But as trade demands eased and policy direction became clearer, deal-making activities resumed in the last month of the quarter.
The IPO market in the second quarter saw a resurgence, with a significant increase in both the number of IPOs and the amount of capital raised. This was driven by several factors, including strategic tariff pauses and positive economic data, which resulted in a rebound in market sentiment. Further, global bond issuance volume was decent.
Thus, the company’s capital market fees are likely to have witnessed a decent growth in the quarter to be reported. The Zacks Consensus Estimate for capital markets income is pegged at $32.8 million, indicating a 5.9% sequential rise.
Average deposits (excluding brokered time deposits) declined 1% to $61.3 billion from the end of the first quarter of 2025 until the end of May. Management anticipates average deposits to decline from those reported in the first quarter of 2025. As such, the company’s service charges on deposits are likely to have declined. The Zacks Consensus Estimate for service charge on deposit is pegged at $47 million, indicating an increase of 2.1% from the prior quarter’s actual.
The Zacks Consensus Estimate for card fees is pegged at $61 million, indicating a 3.4% rise from the prior quarter.
The Zacks Consensus Estimate for overall fee income is pinned at $263.5 million, indicating an increase of 3.7% from the previous quarter’s actual. Management expects non-interest income to witness a strong growth in almost all categories from the prior quarter’s actual of $254 million.
Expenses: The company is expected to have incurred higher expenses due to higher compensation expenses and lower gains on the sale of real estate. Such rising expenses are estimated to have weighed on its expense base to some extent in the quarter under review and hindered bottom-line growth.
Management projects non-interest expenses to increase slightly from the first-quarter 2025 reported level of $584 million as the company continues to balance strategic and risk management investments with the drive toward efficiency.
Asset Quality: The company is likely to have set aside a substantial amount of money for potential bad loans, given the expectations of higher for longer interest rate backdrop and tariff-related uncertainty.
The Zacks Consensus Estimate for non-performing loans is pegged at $308.5 million, indicating a 2.5% rise from the prior quarter's reported figure.
What Does Our Model Unveil for CMA?
Per our proven model, the chances of Comerica beating estimates this time are low. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you can see below. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: Comerica has an Earnings ESP of -0.46%.
Zacks Rank: CMA currently carries a Zacks Rank of 3.
Stocks to Consider
Here are some bank stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around.
The Earnings ESP for WaFd, Inc. (WAFD - Free Report) is +2.00% and it carries a Zacks Rank #3 at present. The company is slated to report third-quarter fiscal 2025 results on July 17. You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past seven days, the Zacks Consensus Estimate for WaFd’s quarterly earnings has been unchanged at 67 cents per share.
The Earnings ESP for Associated Banc-Corp (ASB - Free Report) is +0.81% and it carries a Zacks Rank #2 at present. The company is slated to report second-quarter 2025 results on July 24.
Over the past seven days, the Zacks Consensus Estimate for Associated Banc-Corp’s quarterly earnings has been revised 1.6% upward to 62 cents per share.