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Comerica (CMA) 4Q Earnings Jump 34.7 Pct, Beat Estimates

 January 16, 2013 07:27 AM

(By Balaseshan) Comerica Inc. (NYSE: CMA) reported better-than-expected quarterly earnings on loan and fee income growth combined with expense control. The bank expects lower net interest income and increase in customer-driven non-interest income for the fiscal 2013.

Earnings were $128 million or $0.68 per share for the fourth quarter, up from $95 million or $0.48 per share in the year-ago quarter. The latest quarter results included restructuring expenses associated with the acquisition of Sterling Bancshares Inc. of $13 million.

Net interest income decreased 4.5 percent to $424 million, while non-interest income grew 12.1 percent to $204 million, due to increases in customer-driven categories.

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Analysts, on average, polled by Thomson Reuters had expected earnings of $0.65 per share on revenue of $620.16 million for the fourth quarter.

In the third quarter of 2012, CMA earned $0.61 a share on net interest income of $427 million.

Net interest margin was 2.87 percent, down from 2.96 percent in the prior quarter and down from 3.19 percent in the same period of last year.

On a sequential basis, CMA said average total loans grew $522 million, or 1 percent, driven by 3 percent rise in commercial loans partially offset by a 2 percent decrease in commercial real estate loans.

The provision for loan losses was $16 million in the fourth quarter, lower than $18 million in the year-ago quarter, and down from $22 million in the third quarter of 2012.

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Comerica's tangible common equity ratio was 9.71 percent at December 31, 2012, a decrease of 54 basis points from September 30, 2012. The estimated Tier 1 common capital ratio decreased 24 basis points, to 10.11 percent at December 31, 2012, from September 30, 2012.

Looking ahead into the fiscal 2013, the company expects lower net interest income, reflecting both a decline of $40 million to $50 million in purchase accounting accretion and the effect of continued low rates. The company anticipates an increase in customer-driven non-interest income, reflecting continued cross-sell initiatives and selective pricing adjustments.

The stock, which has been trading between $27.42 and $34 over the past year, ended Tuesday's regular session up 0.47 percent at $31.87.

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