Comerica reports Q2 EPS $1.42, consensus $1.22

Net interest income was stable at $575M, while net interest margin decreased 2 basis points to 3.16%. Estimated common equity Tier 1 capital ratio of 11.94%. “Today we reported second quarter net income of $199M, representing a 16% increase over the prior quarter,” said Curtis Farmer, CEO. “Improved customer sentiment contributed to broad-based loan growth, offsetting modest deposit pressures and keeping net interest income flat to the first quarter and in line with guidance. Noninterest income growth drove higher revenue, and when coupled with lower noninterest expenses, contributed to an increase in PPNR. Credit quality remained a strength with migration in line with expectations and net charge-offs at the low end of our normal 20 to 40 basis points range. With a conservative approach to capital management, we produced an estimated CET1 capital ratio of 11.94%, even after higher loan growth, a compelling dividend and an increase in share repurchases…We believe our proven approach to credit and underwriting serves as a competitive advantage as evidenced by net charge-offs of 22 basis points, at the low end of our normal range.Credit quality was relatively stable as customers remained responsive in managing persistent inflationary pressures and an evolving economic landscape. Our allowance for credit reserves was once again flat at 1.44% of total loans, as the level of overall uncertainty considered in our analysis remained similar to the first quarter. Provision expense increased with robust loan growth, and migration remained in line with expectations with an increase in criticized loans and lower nonperforming assets. We will continue to actively monitor our portfolio and feel we are well-positioned to support our customers as they navigate the dynamic environment.”