Morningstar

Morningstar, Inc.

Equity Bottom-Up

Narrow-moat rated Comerica reported decent second-quarter results, but with rate cuts seemingly imminent, we see more negatives than positives in Comerica’s story at the moment. The bank reported an 8.3% decline in net income after the bank charged off a few energy loans. Despite the decline in net income, earnings per share grew 3.7% to $1.94 due to a reduced share count and return on equity came in at 16.4%. Net interest income grew modestly year over year at 2.2% and noninterest income was…

Comerica is a predominantly commercial-focused bank, with over 90% of loans related to commercial lending. While the bank started in Michigan and remains dominant in this market, Comerica has gradually expanded into California and Texas, which offer more growth potential. This has been a multiyear project and included moving the headquarters to Dallas from Michigan in 2007 and greatly expanding operations in Texas by acquiring Sterling Bancshares in 2011. Expansion in California has happened…

Although narrow-moat rated Comerica reported a decent first-quarter 2019, as the bank works to maintain profitability in a slowing interest rate cycle, an unfavorable deposit mix shift and lower revenue guidance from management highlight just how difficult this can be. Earnings per share grew 32% year over year, largely driven by increasing net interest income, but in the face of slowing growth management has lowered both net interest income and fee income growth guidance. After several…

United States

Comerica Incorporated is the holding company for business, individual, and investment banks with operations in the United States, Canada, and Mexico.  The Company's subsidiaries provide services such as corporate banking, international finance, treasury management, community banking, private banking, small business and individual lending, investment services, and institutional trust.

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