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Dec 31, 2020
Comerica Q4 2020 Earnings Report
Reported a net income of $215 million, with earnings per share increasing by 3% compared to the third quarter, driven by revenue growth and strong credit quality.
Key Takeaways
Comerica's Q4 2020 net income was $215 million, or $1.49 per share, a 3% increase over the third quarter. This was driven by revenue growth and strong credit quality, with deposits increasing nearly $1.5 billion. The CET1 ratio increased to 10.35 percent.
Earnings per share increased 3 percent compared to the third quarter.
Revenue increased 3 percent and credit quality remained strong.
Deposits increased nearly $1.5 billion.
CET1 ratio increased to 10.35 percent, above the 10 percent target.
Forward Guidance
The outlook for the first quarter of 2021, compared to the fourth quarter of 2020, is based on management expectations for gradual improvement in economic conditions.
Positive Outlook
- Average deposits to remain strong.
- Careful management of loan and deposit pricing.
- Income tax expense to be approximately 22 percent of pre-tax income, excluding discrete items.
- Maintain strong capital levels.
- Preferred stock dividends of $6 million.
Challenges Ahead
- Decline in average loans reflects decreases in Mortgage Banker Finance and Energy, partially offset by growth in National Dealer Services and general Middle Market. PPP loan forgiveness potentially exceeds additional advances.
- Decline in net interest income with lower average loan balances, LIBOR and security yields as well as two fewer days in the quarter.
- Provision for credit losses reflects pace of economic recovery; net charge-offs modestly higher.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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