Comerica Third Quarter Results Top Estimates

(RTTNews) - Financial services company Comerica, Inc. (CMA) reported Wednesday profit for the third quarter that increased 25 percent from last year, reflecting lower loan loss provisions, fee income growth, and expense control. Earnings per share and quarterly revenues topped analysts' expectations.

Looking ahead, the company said it lower net interest income, non-customer-driven non-interest income and provision for credit losses in 2013, but anticipates modestly higher customer-driven fees.

"Fee income growth, expense control and continued solid credit quality contributed to our 28 percent year-over-year increase in earnings per share," chairman and CEO Ralph Babb Jr. said in a statement.

The Dallas, Texas-based company reported net income attributable to common shares of $145 million or $0.78 per share for the third quarter, higher than $116 million or $0.61 per share in the prior-year quarter.

On average, 32 analysts polled by Thomson Reuters expected the company to report earnings of $0.71 per share for the quarter. Analysts' estimates typically exclude special items.

Net interest income for the quarter decreased to $412 million, from $427 million a year ago, while non-interest income increased to $214 million from $197 million in the prior-year quarter. Twenty-two Wall Street analysts had a consensus revenue estimate of $616.42 million for the quarter.

"Net interest income remained relatively stable, credit quality continued to be strong, and noninterest income grew quarter over quarter, reflecting an increase in customer-driven fee income. Our capital position continued to be a source of strength to support our growth," Babb Jr. added.

Business bank net income edged up to $209 million from $207 million, while retail bank net income declined to $6 million from $10 million, and wealth management net income was $15 million, down from $18 million last year.

Noninterest expenses declined to $417 million from $449 million a year ago. Provision for credit losses also decreased to $8 million from last year's $22 million.

The company noted that credit quality continued to be strong resulting in lower provisions. Net charge-offs increased slightly from their low level, while nonperforming assets and watch list loans declined.

Average total loans edged up 1 percent, primarily reflecting a 4 percent growth in commercial loans, partially offset by a 5 percent decline in combined commercial mortgage and real estate construction loans.

Average total deposits increased 4 percent, primarily reflecting a 4 percent increase in interest-bearing deposits and a 4 percent improvement in non-interest-bearing deposits.

Looking ahead to fiscal 2013, Comerica continues to expect lower net interest income, non-customer-driven non-interest income and provision for credit losses. However, it anticipates customer-driven fees to be modestly higher based on strong third quarter results.

In Wednesday's regular trading session, CMA is currently trading at $41.32, up $0.75 or 1.85% on a volume of 0.66 million shares.