Comerica 3Q Net Triples On Lower Provisions; Results Miss Views

Date : 10/20/2010 @ 7:29AM
Source : Dow Jones News
Stock : Comerica Incorporated (CMA)
Quote : 72.46  0.03 (0.04%) @ 5:14PM

Comerica 3Q Net Triples On Lower Provisions; Results Miss Views

Comerica (NYSE:CMA)
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Comerica Inc.'s (CMA) third-quarter earnings more than tripled as the bank slashed credit-loss provisions, though results fell short of analysts' estimates and revenue declined.

"In this sluggish and still uncertain economic environment, our customers have remained understandably cautious. This is reflected in the weak loan demand and continued strong core-deposit levels," said Chairman and Chief Executive Ralph W. Babb Jr.

Comerica--which has banks in hard-hit Michigan, Arizona, Florida and California--has improved its results in recent quarters by decreasing the amount of money it sets aside for potential loan losses, like many other banks.

Babb in July said the bank had seen "positive trends" and improving credit quality for several consecutive quarters. On Wednesday, he noted again that results reflected "continued improvement in credit quality."

Loan-loss provisions were $122 million, down from $311 million a year earlier and $126 million in the prior quarter. Net charge-offs, or loans lenders don't think are collectible, fell to 1.32% of average loans from 2.14% and 1.44%, respectively. Nonperforming loans, those near default, rose to 3.24% from 2.99% and 2.98%.

Comerica posted a profit of $59 million, up from $19 million a year earlier. On a per-share basis, which includes preferred-dividend payments, the company swung to a 33-cent profit from a 10-cent loss.

Revenue dropped 16% to $590 million as net interest income improved 4.9% but non-interest income dropped 41%.

Analysts polled by Thomson Reuters had most recently forecast earnings of 41 cents on $620 million in revenue.

Shares closed at $38.39 Tuesday and were inactive premarket. As of Tuesday's close, the stock had risen 30% so far this year.

-By Nathan Becker, Dow Jones Newswires; 212-416-2855; nathan.becker@dowjones.com

 
 

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