Comerica Reports Third Quarter 2016 Net Income Of $149 Million

DALLAS, Oct. 18, 2016

"On our last earnings call, we announced that we had identified more than 20 work streams in our GEAR Up initiative that are expected to drive a significant improvement in our bottom line.  At that time, we also indicated there was more to come, as we were still identifying and analyzing opportunities.  We have determined that those new opportunities add about $40 million to our initial financial target.  As a result, we are now expecting to drive at least $270 million in additional pre-tax income for full-year 2018," said Ralph W. Babb, Jr., chairman and chief executive officer.  "These actions, which we have already begun to execute with urgency, take us a long way towards achieving a double-digit return on equity.  We expect to meet or exceed this goal with sustained growth, net of investment, normal credit costs, continued equity buybacks, and assuming only a 25 to 50 basis point increase in rates.  We are not relying on a significantly better economic environment or a substantial increase in rates to reach our goal.  We remain confident that as we deliver on this initiative, we will create greater shareholder value."

The GEAR Up initiative now includes expected pre-tax benefits of approximately $180 million in full-year 2017 and approximately $270 million in full-year 2018. Additional initiatives include a new retirement program that will replace the current pension plan and retirement account plan for most employees effective January 1, 2017. Active pension plan participants age 60 or older as of December 31, 2016 and current retirees will not be impacted. This initiative is expected to result in annual savings of approximately $35 million in full-year 2017 (assuming current actuarial assumptions). The initiative is also expected to reduce full-year 2016 pension expense to $7 million, resulting in a $4 million credit in the fourth quarter. In addition, streamlining additional operations and administrative support functions is expected to add about $5 million to the initial target.

• Expense reduction targets have been increased to approximately $150 million for full-year 2017, which increases to approximately $200 million for full-year 2018. This is to be achieved through the additional actions identified above as well as the previously announced reduction in workforce, streamlining operational processes, real estate optimization including consolidating 38 banking centers, selective outsourcing of technology functions and reduction of technology system applications. Approximately two-thirds of the workforce reduction target will be completed by year-end 2016.
• Revenue enhancements are unchanged and are expected to be approximately $30 million for full-year 2017, which increase to approximately $70 million for full-year 2018, through expanded product offerings, enhanced sales tools and training and improved customer analytics to drive opportunities.
• Total expected pre-tax restructuring charges of $140 million to $160 million to be incurred through 2018 are unchanged.

(dollar amounts in millions, except per share data)	3rd Qtr '16				2nd Qtr '16				3rd Qtr '15 ARIVA.DE Börsen-Geflüster Kurse Comerica Inc. 52,07 $ -0,15%
Net interest income	$	450			$	445			$	422
Provision for credit losses	16				49				26
Noninterest income	272				268				260
Noninterest expenses	493			(a)	518			(a)	457
Pre-tax income	213				146				199
Provision for income taxes	64				42				63
Net income	$	149			$	104			$	136
Net income attributable to common shares	$	148			$	103			$	134
Diluted income per common share	0.84				0.58				0.74
Average diluted shares (in millions)	176				177				181
Common equity Tier 1 capital ratio (b)	10.68		%		10.49		%		10.51		%
Common equity ratio	10.42				10.79				10.73
Tangible common equity ratio (c)	9.64				9.98				9.91
(a) Included restructuring charge of $20 million (8 cents per share, after tax) in the third quarter 2016 and $53 million (19 cents per share, after tax) in the second quarter 2016.
(b) September 30, 2016 ratio is estimated.
(c) See Reconciliation of Non-GAAP Financial Measures.

"Quarter over quarter, our earnings per share increased 45 percent. This reflected strong credit quality, a reduction in restructuring charges, solid revenue growth and well-managed expenses," said Babb. "While loans were relatively stable, average deposit growth was robust, increasing $1.5 billion. Criticized loans declined and net charge-offs were only 13 basis points of average loans. Our capital position remains solid. In line with our CCAR plan, we increased our share repurchases to 2.1 million shares for a total of $97 million, compared to $65 million in the second quarter.

"We believe we are well positioned for the future," said Babb. "We benefit meaningfully from any increase in interest rates and we continue to adeptly navigate the energy cycle. Yet, we are not waiting for the environment to improve. We are moving with urgency to execute our GEAR Up initiatives and are fully committed to delivering on these efficiency and revenue opportunities to further enhance our profitability."

Third Quarter 2016 Compared to Second Quarter 2016

Average total loans decreased $263 million to $49.2 billion.

• Primarily reflected decreases in Energy, National Dealer Services and Technology and Life Sciences; partially offset by increases in Mortgage Banker Finance and Commercial Real Estate.
• Period-end total loans decreased $1.1 billion to $49.3 billion, primarily due to decreases in National Dealer Services and Energy.

Average total deposits increased $1.5 billion to $58.1 billion.

• Driven by a $2.1 billion increase in noninterest-bearing deposits, partially offset by a $534 million decrease in interest-bearing deposits.
• Average total deposits increased in general Middle Market, Commercial Real Estate and Corporate Banking; partially offset by a decrease in Wealth Management.
• Period-end deposits increased $2.9 billion to $59.3 billion, in part reflecting an elevated deposit level associated with the government card program on the final day of the quarter.

Net interest income increased $5 million to $450 million.

• Primarily the result of one additional day in the third quarter and the benefit from an increase in LIBOR rates, partially offset by higher funding costs.

The provision for credit losses decreased $33 million to $16 million.

• Net credit-related charge-offs were $16 million, or 0.13 percent of average loans, compared to $47 million, or 0.38 percent, in the second quarter 2016. Energy net credit-related charge-offs were $6 million compared to $32 million in the second quarter 2016.
• The allowance for loan losses was $727 million, or 1.48 percent of total loans. The reserve allocation for Energy remained above 8 percent of loans in the Energy business line.

Noninterest income increased $4 million to $272 million.

• Increases in commercial lending fees, largely due to an increase in syndication agent fees, partially offset by a decrease in fiduciary income.
• Non-fee categories increased modestly, primarily due to an increase in income from bank-owned life insurance partially offset by a decrease in deferred compensation plan asset returns.

Noninterest expenses decreased $25 million to $493 million.

• Excluding a $33 million decrease in restructuring charges, noninterest expenses increased $8 million, primarily due to a $6 million decrease in gains from the sale of leased assets and a $3 million increase in outside processing fees.

Capital position remained solid at September 30, 2016.

• Increased repurchases by 640,000 shares to approximately 2.1 million shares of common stock under the equity repurchase program.
• Dividend increased 4.5 percent to 23 cents per share.
• Including dividends, returned a total of $137 million to shareholders.

Third Quarter 2016 Compared to Third Quarter 2015

Average total loans increased $234 million.

• Primarily reflected continued growth in Commercial Real Estate and Mortgage Banker Finance, partially offset by declines in Energy and general Middle Market.

Average total deposits decreased $1.1 billion, or 2 percent.

• Primarily driven by decreases in Municipalities, Corporate Banking, Technology and Life Sciences and the Financial Services Division; partially offset by increases in Retail Bank and Commercial Real Estate.

Net interest income increased $28 million, or 6 percent.

• Primarily due to higher yields on loans and Federal Reserve Bank deposits, as well as earning asset growth; partially offset by an increase in funding costs.

The provision for credit losses decreased $10 million, or 38 percent.

Noninterest income increased $12 million, or 5 percent.

• Excluding a $6 million increase in deferred compensation asset returns, noninterest income increased $6 million, primarily reflecting a $5 million increase in card fees and a $4 million increase in commercial lending fees, largely due to an increase in syndication agent fees; partially offset by decreases in warrant income and risk management hedge ineffectiveness.

Noninterest expense increased $36 million.

• Noninterest expense increased $10 million excluding third quarter 2016 restructuring charges of $20 million and a $6 million increase in deferred compensation plan expense. The remaining increase primarily reflected increases of $5 million each in software expense and FDIC insurance premiums.

Net Interest Income
(dollar amounts in millions)	3rd Qtr '16				2nd Qtr '16 Werbung Mehr Nachrichten zur Comerica Inc. Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 26.04.24 - PR Newswire Cohen & Steers Capital Management - Form 8.3 - Tritax Big Box REIT plc 26.04.24 - PR Newswire Samson Rock Capital LLP - Form 8.3 - TClarke Plc 26.04.24 - PR Newswire Norges Bank - Form 8.3 - BHP Group Limited Sehen Sie sich dieses Unternehmen an:    Foto: andreas160578 - Pixabay Rasanter Aufstieg, Branchenrevolution und Jahresumsatz von 50 Mio. $ weiterlesen» Anzeige wo-site-teaser-box-16764_site-teaser-box_2024-04-26_09%253A00%253A00_2024-04-27_09%253A00%253A59