Comerica Bank Q2 Earnings Show Robust Growth, Strong Capitalization

Comerica Bank reported Q2 earnings with a 14% increase in earnings per share to $1.42. The bank experienced loan growth of nearly 1% and period-end loans increased by 3%. Comerica's capitalization remains strong with a CET1 ratio of 11.94%. Non-interest income grew by $20 million, and the efficiency ratio improved. However, average deposits declined by 1%, and criticized loans increased. The bank reaffirmed its full-year 2025 guidance, projecting net interest income growth of 5% to 7%.

Comerica Inc. (NYSE:CMA) reported its second-quarter (Q2) 2025 earnings, showcasing a 14% increase in earnings per share (EPS) to $1.42. The bank's loan growth was nearly 1%, with period-end loans increasing by 3%. The capitalization remained strong, with a Common Equity Tier 1 (CET1) ratio estimated at 11.94%, above the strategic target of 10%. Non-interest income grew by $20 million, while the efficiency ratio improved. However, average deposits declined by 1%, and criticized loans increased.

The bank's full-year 2025 guidance projects net interest income growth of 5% to 7%, non-interest income growth of 2%, and non-interest expenses growth of 2%. The tax rate is projected to be approximately 22% excluding discrete items. Despite these positive aspects, the company faces challenges such as competitive deposit pricing and maintaining a stable non-interest-bearing deposit mix.

James Herzog, Comerica's CFO, noted that net interest income (NII) is expected to decrease slightly in Q3 due to specific events, such as the redemption of preferred stock and increased deposit pay rates. However, strong loan growth, improved deposits, and the maturity of swaps and securities are expected to drive NII growth in Q4 and into 2026. Peter Sefzik, Chief Banking Officer, stated that pipeline activity has improved, with positive manager surveys and increased loan growth across the board. Curtis Farmer, CEO, acknowledged past challenges but emphasized the company's focus on rebuilding and growth, highlighting recent loan growth and fee income improvements as key drivers for future performance improvements.

The company's stock has seen a revised price target from Keefe, Bruyette & Woods (KBW) to $69.00, a 1.47% increase from the previous target of $68.00. The average target price for CMA is $61.02, with a high estimate of $75.00 and a low estimate of $47.00. The average target implies a 3.74% downside from the current price of $63.39.

Investors should closely monitor Comerica's earnings report and the subsequent market reaction. The company's performance in the upcoming quarter will be crucial in determining the direction of its stock price.

References:
[1] https://finance.yahoo.com/news/comerica-inc-cma-q2-2025-070511594.html
[2] https://www.ainvest.com/news/comerica-q2-earnings-preview-analysts-expect-decline-earnings-increase-revenues-2507/
[3] https://site.financialmodelingprep.com/market-news/fmp-comerica-tops-earnings-estimates-as-loan-growth-offsets-deposit-decline
[4] https://za.investing.com/news/company-news/comerica-q2-2025-slides-net-income-jumps-16-loan-growth-accelerates-to-3-93CH-3794799