Comerica (NYSE: $CMA) is a regional financial services company that operates a regional bank, which offers both personal and business banking, trust services, and wealth management. On Monday, April 21, 2025, before markets opened, it released its Q1 results. Here is a deep dive into those results.
Comerica Q1 Results
For the first quarter of fiscal 2025, Comerica reported net interest income of $575 million, below estimates of $831.34 million. It reported an EPS of $1.25, beating estimates of $1.15. The regional bank reported a net income of $172 million, compared to $138 million the previous year. Noninterest income came in at $254 million compared to $236 million last year, driven by favorable deposit trends and expense discipline.
Other Q1 Highlights
Comerica ended Q1 with a Common Equity Tier 1 Capital Ratio of around 12.05%, far above the 10% target, a signal of strong capital management. It reported a net interest margin of 3.18%, an improvement from the 3.06% reported in the previous quarter. Its return on average assets (ROA) rose to 0.90% from 0.66% the previous year, a sign of enhanced profitability.
The company reported a $403 million decline in loans to $50.2 billion, with the average yield on loans, including swaps, down 12 basis points to 6.13%, an impact of the lower rate environment, and the decline in nonaccrual interests.
Securities declined $411 million to $15 billion, reflecting paydowns and a rise in average unrealized losses. Deposits in Q1 fell $1.4 billion to $61.9 million, with noninterest-bearing and interest-bearing deposits down $742 million and $706 million, respectively.
Comerica (CMA) Market Performance
Following the mixed Q1 results, CMA shares dipped 3.84% during the early morning trading session to $50.92 per share as of 10:17 AM in New York on April 21, 2025.
Years to date, CMA shares are down 17.66%, while over the past six months, they are down 17.89%. Over the past 12 months, the shares have fallen 1.22%.
Analysts give Comerica an overall hold rating. They forecast an average price of $66.64 for the stock, which is a 31.18% upside based on the most recent price. The analysts give a wide range of forecasts, with a high of $80 and a low of $55.
Is CMA A Buy Amid Muted Loan Demand
One of the main challenges Comerica faces going forward is muted loan demand. It also faces a major decline in deposits, which are offset by discipline in expense management. Its proactive deposit pricing strategies, coupled with conservative capital management, could help it achieve profitability growth.
There is only so much a regional bank can do amid macroeconomic challenges. However, Comerica’s management has been up to the task when navigating the current situation. While the possibility of a rate cut by the Fed appears closer than ever, it is partly driven by questions regarding the health of the economy. Consequently, the best plan of action could potentially be to wait on the sidelines and await clarity regarding the direction of the economy.
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