Comerica (CMA) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income was $206 million ($1.49 per share), up $68 million sequentially, driven by higher noninterest income, lower expenses, and strong credit quality, despite a decline in net interest income.

• Period-end loan balances grew 2%, while average loans and deposits declined year-over-year; customer-related interest-bearing deposits increased and noninterest-bearing mix remained favorable.

• Net charge-offs were 9 bps, below historical averages, and credit quality remained strong.

• Published 16th Annual Corporate Responsibility Report and received recognition for employee and community focus.

Financial highlights

• Net interest income was $533 million, down $15 million sequentially; net interest margin improved to 2.86%.

• Noninterest income rose $55 million to $291 million, mainly from risk management hedging and capital markets.

• Noninterest expenses fell $48 million to $555 million, driven by lower salaries, benefits, and FDIC expense.

• Diluted EPS for Q2 2024 was $1.49, up from $0.98 in Q1 2024; adjusted EPS was $1.53.

• Efficiency ratio improved to 67.77% from 76.91% in the prior quarter.

Outlook and guidance

• Full-year average loans projected to decline 4% or grow 2% point-to-point from year-end 2023, with 2H24 growth offsetting 1H24 softness.

• Full-year average deposits expected to be down 3% from 2023; noninterest-bearing mix to remain in the upper 30s.

• Net interest income projected to decline 14% year-over-year; Q3 NII expected to decline 2%-3% sequentially.

• Noninterest income expected to grow 1%-2% reported, but down 1% year-over-year when adjusted.

• CET1 ratio expected to remain well above 10% through year-end.