Comerica (CMA) RBC Capital Markets Financial Institutions Conference 2025 summary

Core strengths and financial position

• Maintains top quartile net charge-offs and strong credit quality, with net charge-offs at 0.13% in 4Q24 and allowance for credit losses at 1.44% of loans.

• CET1 capital ratio near 12% (11.89% in 4Q24), supporting growth, resumed share repurchases, and a strong capital position.

• Liquidity has strengthened since 2023, with a conservative approach and loan-to-deposit ratio below historical average.

• Core customer deposits remain robust, efficiently funding loan growth and supporting stability.

• Asset sensitivity is managed to remain mostly neutral, with flexibility for rate changes.

Growth strategies and business development

• Plans to add at least 70 bankers from internal training over five years to support middle market and business banking expansion, prioritizing high-growth markets.

• Geographic expansion in the Southeast, Denver, and Phoenix has shown strong early results.

• Focus on investing in digital onboarding, treasury management, and payments modernization to enhance customer experience and drive fee income.

• National and specialty businesses leverage industry expertise for market-leading positions and new customer acquisition.

• Small business segment has grown to $5B in non-interest-bearing deposits, with a 10% annual growth target and best net customer growth since 2020.

Revenue and income outlook

• Net interest income projected to rise 6-7% year-over-year, with about half from BSBY income and structural benefits from maturing swaps and securities expected to enhance NII in 2025.

• Core net interest income expected to grow 3.5% annually, driven by deposit management and efficient funding.

• Fee income targeted for mid-single digit growth, with focus on capital markets, wealth management, and payments.

• Wealth management and capital markets businesses are expanding, with new M&A offerings gaining traction and wealth management representing ~27% of noninterest income.

• Noninterest income pressured by securities repositioning losses and regulatory changes, but expected to recover in 2025.