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Mar 31, 2021
Comerica Q1 2021 Earnings Report
Generated first quarter earnings, driven by a reduction in credit reserve, robust fee-generating activity, and expense discipline.
Key Takeaways
Comerica reported a strong start to the year with Q1 2021 earnings of $2.43 per share, a 59% increase over the fourth quarter. The results were driven by a reduction in the credit reserve, robust fee-generating activity, and expense discipline. The company plans to resume share repurchases in the second quarter.
Net income was $350 million, or $2.43 per share.
Credit quality improved with a reduction in the credit reserve due to improvements in the economic outlook and decreases in nonaccrual and criticized loans.
Noninterest income increased 2% over the previous quarter, driven by robust fee-generating activity.
Expenses decreased 4% due to expense discipline.
Comerica
Comerica
Comerica Revenue by Segment
Comerica Revenue by Geographic Location
Revenue by Segment
Retail Bank Revenue
CapyFin.comWealth Management Revenue
CapyFin.comFinance/Other Revenue
CapyFin.comRevenue by Geographic Location
Michigan Deposits Revenue
CapyFin.comCalifornia Deposits Revenue
CapyFin.comTexas Deposits Revenue
CapyFin.comOther Markets Deposits Revenue
CapyFin.com Forward Guidance
Management expects continued improvement in economic conditions. The second quarter of 2021, compared to the first quarter of 2021, expects increase in net interest income as lease residual adjustment ($17 million in first quarter) does not repeat.
Positive Outlook
- Solid average loan growth in nearly all business lines (excluding PPP)
- Average deposits to remain strong, benefiting from latest stimulus.
- Increase in net interest income as lease residual adjustment ($17 million in first quarter) does not repeat.
- Strong credit quality continues, with provision reflecting economic conditions.
- Resume share purchases; CET1 target of approximately 10 percent.
Challenges Ahead
- Average loans (excluding PPP) reflect decline in PPP loans due to forgiveness process.
- Average deposits begin to wane as customers put cash to use.
- Net interest income reflects lower securities yields.
- Decrease in noninterest income as first quarter levels of derivatives, warrants and deferred compensation asset returns not expected to repeat.
- Stable noninterest expenses reflect lower salaries and benefits (annual stock-based compensation and deferred compensation asset returns not expected to repeat, as well as seasonally lower payroll taxes partly offset by merit increases and one additional day in the second quarter) offset by increase in outside processing as well as seasonal increases in occupancy and advertising.
Revenue & Expenses
Visualization of income flow from segment revenue to net income