Comerica Inc (CMA, Financial) released its Q3 2023 earnings on October 20, 2023, reporting a net income of $251 million, or $1.84 per share. The company's successful deposit strategy led to growth in customer balances, reflecting its strategic balance sheet management. The company's CET1 ratio increased to 10.79%, surpassing its 10% target, indicating strong capital management.
Financial Highlights
Comerica Inc (CMA, Financial) reported a net interest income of $601 million, a decrease from $621 million in Q2 2023 and $707 million in Q3 2022. The provision for credit losses was $14 million, down from $33 million in Q2 2023 and $28 million in Q3 2022. Noninterest income was $295 million, slightly down from $303 million in Q2 2023 but up from $278 million in Q3 2022. The company's noninterest expenses increased to $555 million from $535 million in Q2 2023 and $502 million in Q3 2022.
Balance Sheet and Credit Quality
Comerica Inc (CMA, Financial) reported average loans of $53,987 million and average deposits of $65,883 million. The company's return on average assets was 1.12%, and the return on average common shareholders' equity was 19.50%. The net interest margin was 2.84%, and the efficiency ratio was 61.86%. The company's common equity Tier 1 capital ratio was 10.79%, and the Tier 1 capital ratio was 11.29%.
Comerica's credit quality remained strong, with a net charge-off of 0.05% of average total loans. The allowance for credit losses increased to 1.38% of total loans, reflecting an uncertain economic outlook and credit migration, as well as changes in portfolio composition and lower loan volumes.
Future Outlook
Comerica Inc (CMA, Financial) remains committed to running an efficient organization as it navigates expense pressures. The company's abundant liquidity and robust fee income provide flexibility as it positions itself to prioritize high-return growth in the future. The company's credit quality remains strong, and it expects further migration to remain manageable.
