Comerica (CMA) Goldman Sachs 2024 U.S. Financial Services Conference summary

Business performance and outlook

• Management expects a strong quarter and continued growth into 2025, with optimism across business lines and customer segments.

• Net interest income in 3Q24 was $534MM, up slightly from 2Q24, and is expected to grow further, supported by swaps and securities.

• Customer deposits, especially core deposits, are growing, while brokered deposits are being replaced with less expensive alternatives.

• Investments in capital markets, treasury management, technology, and regional expansion are driving revenue opportunities.

• Noninterest income was negatively impacted by noncustomer income, but customer-related streams showed positive momentum.

Deposit and loan trends

• Core customer deposits are up, but non-interest-bearing deposits are under pressure due to higher rates.

• Loan balances remain flat, with declines in CRE due to paydowns, but demand is strong in core segments and loan growth is anticipated to improve in 2025.

• Non-interest-bearing deposits are expected to face continued modest pressure into early 2025, with a potential inflection point mid-2025 as rates fall.

Credit quality and risk management

• Maintained strong credit discipline with low net charge-offs of 0.08% in 3Q24 and a reserve ratio of 1.43%.

• Portfolio remains well-diversified and resilient, with conservative underwriting and proactive monitoring.

• Commercial real estate exposure is primarily in lower-risk multifamily and industrial projects, with minimal office exposure.

• Criticized loans and nonperforming assets remain well below historical averages.

• SNC relationships are managed with strict underwriting, and only ~3% are criticized.