Comerica's Q1 2025: Diverging Views on Loan Growth, Efficiency, and NII Expectations

Loan growth outlook and sentiment, efficiency ratio and expense management, deposit costs and strategy, loan demand outlook, and net interest income (NII) growth expectations are the key contradictions discussed in Comerica's latest 2025Q1 earnings call.



Strong Financial Performance Amidst Economic Uncertainty:
- Comerica reported earnings of $1.25 per share for Q1 2025, maintaining a robust net interest margin expansion of 12 basis points.
- This was achieved despite a challenging macroeconomic environment, as customers await clarity amidst market uncertainties.

Deposit and Loan Trends:
- Average deposits outperformed guidance with a $1.4 billion decrease, and noninterest-bearing deposits remained flat at 38% of total deposits.
- The deposit focus and pricing strategy contributed to this growth, although seasonal outflows and lower broker time deposits were noted.

Credit Portfolio Resilience:
- Comerica's credit portfolio saw net charge-offs increase to 21 basis points, remaining in the normal range of 20 to 40 basis points.
- Credit metrics remained low, with persistent inflationary pressures impacting customer profitability, but the company maintained a healthy credit position.

Capital Management and Share Repurchases:
- Comerica returned $143 million to common shareholders through share repurchases and dividends in Q1 2025.
- The company maintained a strong CET1 ratio of 12.05%, providing flexibility for continued share repurchases pending economic developments.

Regional and Business Strategy:
- Comerica's growth outlook focuses on its unique business model, which benefits from geographic diversity and a conservative approach to credit and capital management.
- The company remains confident in navigating a dynamic environment, supported by a strong capital position and a diverse, commercially-oriented business mix.