Comerica's 2024 Earnings Report: Navigating Loan Growth, Deposit Trends, and Credit Quality Challenges

Financial Performance and Loan Growth Outlook:
- Comerica reported earnings of $698 million, or $5.02 per share for fiscal year 2024, with fourth-quarter earnings of $170 million, or $1.22 per share.
- The company anticipates flat to up 1% average loans in 2025, with expected growth in most businesses, excluding anticipated payoffs in commercial real estate.
- The outlook is supported by improved customer sentiment and higher production levels, despite ongoing volatility in the rate curve.

Deposit Trends and Funding Mix Optimization:
- Average deposits decreased by $550 million or 0.9%, with brokered CDs decreasing by $1.4 billion.
- Excluding brokered CDs, customer deposits grew by over $800 million, with a focus on interest-bearing deposits.
- Comerica aims to reduce brokered time deposits, which are priced at 5.4%, by eliminating these deposits by the end of 2025, improving funding efficiency.

Credit Quality and Risk Management:
- Comerica maintained low net charge-offs at 13 basis points, with credit quality remaining a strength.
- Persistent inflation and elevated rates pressured customer profitability, leading to modest criticized and non-performing loans, which were expected and factored into reserves.
- The company expects manageable migration towards normal credit levels in 2025, with projected net charge-offs at the lower end of the 20 to 40 basis points range.

Capital and Shareholder Returns:
- Comerica's estimated CET1 capital ratio increased by 80 basis points in 2024, with a reported CET1 ratio of 11.89%.
- The company returned capital to shareholders through $100 million in share repurchases in Q4 and plans an additional $50 million in Q1 2025.
- Future capital decisions will be influenced by loan growth, the forward curve, and the broader economic environment.