Magazine article American Banker

Urban Focus Paying off for Comerica

Magazine article American Banker

Urban Focus Paying off for Comerica

Article excerpt

Byline: Alan Kline

Comerica Bank (CMA) is generating enough loan growth in its key markets that it is feels no pressure to expand through acquisitions, Chairman and Chief Executive Ralph Babb says.

In Texas, where the economy is adding roughly 1,000 new jobs a day, average loan balances increased by 8% over the past year, to $10.1 billion, Comerica said in its first-quarter earnings announcement Tuesday.

Meanwhile, in California, loan balances climbed by more than 13% year over year, to $13.5 billion, aided largely by the strength of the technology sector in Northern California and the rebounding housing market in Southern California.

"We are very comfortable with our footprint today," Babb said in a conference call discussing the bank's first-quarter results. "When you look at the loan growth that we're seeing in the Texas and California markets, as well as the Michigan markets, we have a very good position in the urban markets that we're focused on."

Loan growth, combined with improved credit quality and lower overhead, helped boost Comerica's profits by 3% year over year, to $134 million. Its earnings per share of 70 cents were 2 cents better than estimates of analysts polled by Bloomberg.

Following the earnings announcement, Sandler O'Neill & Partners raised its 2013 earnings estimates by 15 cents, to $2.83 per share, and bumped up its 2014 estimates by 30 cents, to $2.80 per share.

In a research note, Sandler O'Neill credited management with continuing "to find ways to maintain earnings in an environment that is not ideal. …

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