DALLAS – Comerica Incorporated (NYSE: NYSE:CMA) reported a second-quarter earnings beat on Wednesday, with adjusted earnings per share (EPS) of $1.53, surpassing the analyst consensus of $1.19. Despite this, shares of the financial services company fell by 6%.
The bank's revenue for the quarter was $824 million, also exceeding the consensus estimate of $812.82 million. However, when compared to the same period last year, net interest income saw a decline from $621 million to $533 million, contributing to a year-over-year (YoY) drop in net income from $273 million to $206 million.
Curtis C. Farmer, Comerica Chairman and CEO, highlighted the company's achievements, noting an increase in loan balances and improvements in fee income and expenses. "Our focus on responsible growth drove an inflection in loan balances through quarter-end," Farmer said. He also emphasized the company's strong credit quality, with net charge-offs of 9 basis points, below historical averages.
Despite the positive performance in EPS and revenue, the market's reaction was negative, with Comerica's stock price declining. This suggests that other factors may be influencing investor sentiment, which were not disclosed in the press release.
The reported results also showed a decrease in average loans from $55.4 billion in the second quarter of the previous year to $51.1 billion this quarter. Additionally, average deposits decreased from $64.3 billion to $63.1 billion over the same period.
Comerica's adjusted return on average assets (ROA) and return on average common shareholders' equity (ROE) for the quarter were 1.07% and 15.18%, respectively, showing a mixed picture compared to the previous year, where ROA was 1.21% and ROE stood at 19.38%.
The company's capital ratios remained strong, with a common equity Tier 1 capital ratio of 11.55% and a Tier 1 capital ratio of 12.08%, both well above the regulatory minimums.
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