Comerica Revises Q4, 2013 Results On Unfavorable Jury Verdict

(RTTNews) - Financial services provider Comerica Inc. (CMA) on Tuesday revised downward its profit for the fourth quarter as well as fiscal year 2013, citing an unfavorable Montana jury verdict.

In the Montana litigation over a $9 million loan, Comerica Bank was a third-party defendant. The case was tried before the Montana Second District Judicial Court for Silver Bow County in Butte, Montana.

The claims underlying the lawsuit against Comerica Bank grew out of an initial $9 million revolving line of credit loan extended by the bank to Masters Group International, Inc., a then Michigan-based office supply company.

In 2006, the loan was subsequently increased to $10.5 million and later paid in full through collection actions taken by Comerica Bank following a default by Masters.

Comerica said that following the jury verdict, it has increased its reserve for litigation and decreased incentive compensation expense based on the revised results, effective as of December 31, 2013. This resulted in a decrease in net income of $28 million, or $0.15 per share, for the fourth quarter of 2013.

Ralph Babb Jr., chairman and chief executive officer of Comerica said, "As we consider possible courses of action, including appealing the decision to the Montana Supreme Court, the sole appellate court for the state of Montana, we recorded a charge in the fourth quarter 2013 in accordance with applicable accounting principles. We believe we had meritorious defenses for this litigation and anticipated a favorable outcome."

Accordingly, Comerica's fourth-quarter net income attributable to common shares is now $115 million or $0.62 per share, compared to the previously reported net income of $143 million or $0.77 per share. For the year-ago quarter, the company's net income was $128 million or $0.68 per share.

Comerica had earlier reported its financial results for the fourth quarter and fiscal 2013 on Friday, January 17, 2014.

For fiscal 2013, Comerica revised its net income attributable to common shares to $533 million or $2.85 per share from the previously reported net income of $561 million or $3.00 per share.

In Tuesday's regular session, CMA is trading at $48.84, up $1.19 or 2.50 percent on a volume of 241,868 shares.