2023-07-21 09:25:03 ET
Comerica ( NYSE: CMA ) stock jumped 6.7% in Friday premarket trading after delivering Q2 profit and revenue above Wall Street expectations, thanks to higher fee income and strong lending growth. Still, the regional lender reduced its net interest income growth outlook for the year as increased funding and deposit costs weigh.
For 2023, it sees NII rising 1%-2% from last year, down from the 2.36% Visible Alpha consensus and from 6%-7% in the prior guide, according to its Q4 slides.
Noninterest income for the year is now expected to advance 7%-9%, vs. +6% to +7% in the previous outlook.
2023 average loans are targeted to climb 8%, driven by momentum in CRE & Dealer. It expects average deposits to fall 14%-15%, assuming continued stabilization.
As for credit quality, normalization is expected to continue, with net charge-offs expected to stay under its normal 20 to 40 basis point range.
Q2 EPS of $2.01 , beating the average analyst estimate of $1.86, fell from $2.39 in Q1 and rose from $1.92 in Q2 of last year.
Net interest income of $621M dipped from $708M in the prior quarter and gained from $561M a year before. Net interest margin of 2.93% vs. 3.57% in Q1 and 2.70% in Q2 2022.
Provision for credit losses increased to $33M from $30M in Q1 and from $10M in Q2 2022.
Noninterest income came in at $303M, up from $282M in Q1 and from $268M in Q2 2022. Noninterest expense of $535M vs. $551M in Q1 and $482M in the year-earlier quarter.
Average loans of $55.4B rose 3.6% Q/Q; average deposits of $64.3B fell 5.2% Q/Q.
More on Comerica:
- SA's Quant system rates CMA a Hold
- Comerica plans to exit mortgage finance business by end of year
- Comerica Bank Towering above The Skyline, A Buying Potential
For further details see:
Comerica stock climbs after exceeding Q2 profit expectations